What Is ESG Investing?
ESG investing broadly refers to the incorporation of environmental, social and governance factors alongside traditional financial analysis. Depending on the nature of the strategy, one or more approaches can be used within the investment process.
Approaches to ESG Investing
The categories defined here are based on internal specifications which are subject to change. Internal specifications may rely on investment policies and procedures and/or disclosures related to specific strategies.
ESG Integration
This investment approach, also referred to as ESG consideration, considers or integrates ESG factors alongside other factors to assess the risk-reward profile of securities. As of June 2024, 69% of New York Life Investment Management LLC (NYLIM LLC)’s assets under management incorporated ESG factors as part of the investment process.
ESG Focused
Also called positive selection, best-in-class, or inclusionary investing, this investment approach systematically considers ESG factors as a significant part of its investment thesis in order to select investments. May align with environmental or social themes.
ESG Impact
This investment approach seeks to achieve specific ESG impact(s) alongside financial returns. May align with environmental or social themes. This approach is commonly used for investors who want to invest in companies and issuers that are creating a positive change.
Stewardship
ESG incorporation generally functions alongside - or in combination with - stewardship or active ownership. Stewardship includes proxy voting and engagement with companies in dialogue and can be conducted across all portfolios.
Featured Resources
Welcome to the Candriam Academy
(CE Approved)
Join Candriam Academy, the world’s first free-to-access accredited training platform for ESG investing.
ESG Talks: Educational, Conversational and 1 CE per Video
Candriam Academy’s ESG Talks video series focuses on today’s most pressing economic, social and environmental issues.
Risks in Supply Chain Management
Essentials Guide: Influence Change with Greater Impact
Essentials Guide: Dispelling the Three Most Common Myths
Responsible Investing Policies and Reports
As signatories to the United Nations-supported Principles for Responsible Investment (PRI), New York Life Investment Management LLC (NYLIM LLC) is committed to the six Principles for Responsible Investment.
ESG Investing Style Risk Impact investing and/or Environmental, Social and Governance (ESG) managers may take into consideration factors beyond traditional financial information to select securities, which could result in relative investment performance deviating from other strategies or broad market benchmarks, depending on whether such sectors or investments are in or out of favor in the market. Further, certain ESG strategies may limit exposures found in similar strategies or broad market benchmarks, which could also result in relative investment performance deviating. There is no assurance that employing ESG strategies will result in more favorable investment performance.