Diana Ribeiro Duarte, Pedro Capitão Barbosa and Sofia Araújo Matias signed the opinion article entitled "ESG lays the groundwork, impact investing extends the boundaries", recently published by IFLR.
The lawyers discuss the differences between impact investing and ESG investing, pointing out that impact investing seeks to have a measurable social or environmental effect, while ESG focuses on sustainability factors and business practices.
They go on to say that ESG investors prioritize financial return over sustainability, while impact investors may accept lower financial returns in favour of greater social or environmental impact.
“Although impact investing and ESG investing are frequently used synonymously and share many similarities, there are significant distinctions between the concepts. This misunderstanding has detracted attention from the value of impact investment because it unduly subsumes this investment strategy into the ESG investment framework (which is already cluttered) [...]”.
Click here to read the full article.
