Integrating Sustainability Criteria into the Investment Process

Sustainable investments encompass a set of investment strategies that, when evaluating companies and institutions, integrate financial analysis with environmental, social, and governance criteria (ESG), aiming to create value for investors and society as a whole. Sustainable investments involve a holistic approach that considers not only financial performance but also the broader impact of companies on the environment, society, and governance structures. Specifically, environmental considerations pertain to the challenges of climate change, ecosystem impacts, and related risks; social considerations address issues of inequality, inclusiveness, labour relations, investment in human capital, and improving relations within communities; and governance of public and private institutions relates to the evolution of the corporate governance model and the issues faced by workers and their trade union representatives. This chapter explores strategies for effectively integrating sustainability criteria into the investment process.