[5-minute knowledge][The merits and demerits of ESG investing] Risk assets and sustainability: Can ESG become an investment strategy? The essence of ESG and its long-term impact on the market, and the gap with practical implementation
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Chapter 1: Changing Notions of Investment
Once, returns justified everything.
Companies rewarded investors by maximizing profit, and investors judged based on numbers alone.
However, since entering the 21st century, the market's “ethical structure” has gradually begun to transform.
Environmental destruction, social inequality, governance shortcomings
These issues have pressed from the periphery of the market toward its center.
ESG—Environment, Social, Governance—is a symbol of this trend.
What used to be considered the exclusive domain of certain institutional and ethical investors has now been integrated into the strategies of Wall Street giants like BlackRock and Goldman Sachs.
Yet the essential question remains this:
Can ESG truly be an effective investment strategy?
Or is it merely a euphemistic slogan?
In this long-form article, we will delve from the origin of ESG investing to its divergence from practice, and to its long-term impact on the market as a whole.
We hope it provides you—on the front lines of trading—with hints to rethink your decision-making framework starting tomorrow.