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Published in:
2021 | OriginalPaper | Chapter
4. Sustainability as Part of Qualitative Analysis
Authors : Hanna Silvola, Tiina Landau
Published in: Sustainable Investing
Publisher: Springer International Publishing
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Abstract
Investors assess the risks and opportunities related to ESG aspects: the environment, social responsibility and governance. This is commonly referred to as the integration of sustainability into investment decisions. The goal is to achieve better returns with a more controlled risk (improving the risk-to-return ratio) and/or manage the investor’s reputation. In practice, this means that the return potential may otherwise be the same for different companies, but some companies are subject to higher ESG risks. In other words, an investor benefits if they can identify an investment that offers similar returns with a lower risk.