Brainie Series Chapter 1: Introduction to ESG Investing

The learning objectives of this chapter is to provide a thorough introduction of what ESG investing is all about. The chapter covers the main definitions and concepts needed to get a better understanding of ESG investing.

Chapter 1: Overview of ESG Investing

The chapter provides a definition of ESG investment and the different approaches to ESG investing, responsible investment, socially responsible investment, sustainable investment, best-in-class investment, ethical/values-driven investment, thematic investment, green investment, social investment & shareholder engagement.

Moreover, it gives an overview of sustainably based concepts like corporate social responsibility and triple bottom line (TBL) accounting.  Another section of this chapter delves into the benefits and challenges of incorporating ESG in decision making and also the linkages between responsible investment and financial system stability.

Other concepts tackled in this chapter are: financial materiality of ESG integration, double materiality, and dynamic materiality and how they relate to ESG analysis, practices and reporting.

Mega trends are also tackled in this chapter by explaining their systemic nature, and their potential impact on companies and company practices. 

The chapter ends by giving an explanation on the three ways in which investors typically reflect ESG considerations in their investment process and also by explaining the aims of the main supranational ESG initiative and organisations and the progress achieved to date.

Brainie Series

Check out The Brainie Series, on our YouTube channel which is a series of 9 videos, each covering a chapter of the CFA ESG or CFA Institute Certificate in ESG Investing curriculum. Our goal with these videos is to provide you with additional guidance and help you pass your CFA ESG exam.