Stockhead: The small and mid-cap ASX companies leading way on commercial ESG solutions
As investors increasingly use Environmental, Social and Governance (ESG) criteria as a set of standards for consideration in their investment decisions, some small and mid-caps are excelling at setting a benchmark.
Environmental, Social and Governance (ESG) has experienced rapid growth in recent years and is estimated to be worth $35.3 trillion, equivalent to around a third of assets under management globally.
Europe is currently the epicentre of ESG action, but Australian investors are certainly not missing out. Over the last five years, shares in ESG fund Australian Ethical Investment (ASX:AEF) have gained 1,100%, or 12 times.
But what exactly is ESG and why has it experienced such rapid growth? Matt Gaden, Head of Australia at investment firm Janus Henderson, told Stockhead that integrating ESG factors into investment decisions is “fundamental to delivering the results clients seek”.
“As a long-term investor, Janus Henderson supports new and existing companies making long-term investments in reducing waste, improving efficiency and environmental technology aimed at driving future sustainable returns,” Gaden said.