What is Environmental, Social and Governance (ESG) and how does it relate to Sustainability trading

In the new reality of the post-Covid world, environmental, social, and governance (ESG) will increasingly become central to the economic equation, and trade finance is uniquely placed to mobilize capital at a scale necessary to drive meaningful change.

The main difference between sustainability and ESG is that ESG may be explicitly measured with defined environmental, social, sustainability, and governance metrics. ESG also has precise parameters that outline its reach, guidelines, and disclosure of data.

ESG is the analysis of a business's ethical impact and long-term viability, and sustainable financing is how this analysis is used to make an investment plan.

Sustainable finance weighs sustainability factors and risks just as heavily as traditional considerations when making investment decisions.

Sustainable investing directs investment capital to companies that seek to combat climate change and environmental destruction while promoting corporate responsibility.

At Kensington UCITS ICAV, we are dedicated to improving our portfolios and offering more products every day that fall into this category. We have become more thorough in the way we look into the companies that we invest in.

Without proper structural and developmental resources in place, ESG-centric companies may find it difficult to compete initially, even with a strong ESG proposition. Trade finance can help alleviate this market failure through sustainable financing. In fact, through sustainable investment practices, trade finance can drive ESG implementation at the core of businesses worldwide.

Through selective funding, we have the power to incubate the strongest ESG propositions. With sustainable financing and investing practices growing rapidly, demand for trade finance is bound to increase, which can potentially narrow the trade finance gap to some extent.

Sustainability trading is a great way to diversify your portfolio while minimizing risk, depending on the opportunities available. Some sustainable alternative investment opportunities while helping the environment do carry high risk, which may not be for every investor; however, as with all services we provide here at Kensington UCITS ICAV, your financial advisor will explain in detail all of the risks associated with your offered investment opportunities.