Differences between ESG & impact investing
Helee Lev, Goby's CRO, explains the differences between ESG (Environmental, Social, Governance) and impact investing, who the term applies to, and what kind of companies should look to incorporate one or both of them into their strategies.
Hi, Helee Lev at Goby and Henry Lev, wanting to talk for a minute about the difference between impact investing and ESG. They're often used together, but they're not the same thing.
Impact investing refers to when an investor is making investments into companies whose actual business have an impact on the world in some positive way, be it social, be environmentally, so the business is having an impact.
ESG (Environmental, Social, Governance) refers to what the actual firm is doing at the firm-wide level with regards to their environmental practices, their social, and their governance. It should extend beyond just the firm-level, down into the investments, but within ESG companies can be investing in portfolio companies that don't have a specific impact, but the firm can.
With impact investing, the types of companies that are being invested in are the ones that have the impact.
So, do you need one or both? I believe both. But that's a conversation for another day.