What is the concept of ESG?

ESG means environmental, social and corporate governance. Different from traditional financial indicators, ESG indicators evaluate the sustainability of business operations and its impact on social values from the perspectives of environment, society and corporate governance. ESG indicators have been applied in domestic and foreign investment markets.

ESG investment originated from socially responsible investment (SRI), which is the three most important considerations in socially responsible investment. ESG investment originated in Europe and America. The first ESG fund in the United States was established in 197 1, and the first ESG index was established in 1990.

In 2006, the United Nations established the Principle Organization for Responsible Investment (UNPRI). At the beginning of its establishment, more than 80% of the contractors came from Europe and America, and ESG investment was widely recognized in Europe and America.

Before the popularity of ESG concept, the well-known concept was socially responsible investment (hereinafter referred to as "SRI"), and the concept of SRI investment was generally considered to have originated from early religious activities.

In the United States in the18th century, Methodists refused to invest in enterprises related to alcohol, tobacco, gambling or weapons. This exclusive investment standard formed on the basis of religious teachings has become the initial prototype of SRI.

/kloc-At the end of 0/9, Quakers established an asset management institution called Quakers Friends Trust, which explicitly excluded the investment of companies related to weapons, tobacco or alcohol. The agency still manages hundreds of millions of dollars in funds.

In the 1960s and 1970s, with the social development and environmental changes, and the awakening of ethnic minorities' awareness of environmental protection, human rights equality, anti-war and equality, some investors hoped to reflect their correct value orientation towards social responsibility in their investment activities.

Therefore, the basis and starting point for the formation of SRI has gradually changed from religious teachings to the reflection of current social ideology, thus becoming a real "social responsibility" investment.