Environmental, social and governance integration

ESG investing means considering environmental, social and governance issues and risks during the investment process. In addition to helping you align your portfolio with your sustainable investing goals, it’s also just good, smart investing. That’s because these factors may affect a company’s financial performance—not just have a positive societal impact. At J.P. Morgan Private Bank, we integrate ESG analysis into our approach and evaluation of all investment opportunities. It’s becoming business as usual.
Watch Marisa Buchanan, Director of Sustainable Finance at J.P. Morgan Chase, introduce the approach of ESG Integration.

We evaluate ESG characteristics alongside traditional financial criteria. This allows us to identify opportunities with superior risk controls and long-term, sustainability-oriented drivers of performance.

Deciphering the acronym ESG

Let’s start with unpacking what each of the factors means.

  • Environmental: Evaluating the way a company uses its resources and sets policies to limit its environmental impact and protect the environment. Waste disposal and recycling efforts. Carbon emission and pollution. Water usage. Companies with comprehensive environmental policies, practices and performance generally receive higher ESG ratings.
  • Social: Evaluating a company’s policies and practices toward employees, suppliers, customers and communities. Human rights. Employment and pay equality. Health safety and quality standards. Employee relations. Labor conditions. Community development. And more.
  • Governance: Evaluating a company’s corporate policies and procedures. Board composition. Diversity. Executive compensation. Employee relations. Business ethics and reputational issues. Exposure to bribery or corruption. These are all essential tenets of sound corporate governance.

It can be difficult to quantify the exact financial benefits of ESG integration. But several studies have shown that companies with highly rated ESG practices carry less risk and can generate better performance than peer companies that have less focus on ESG factors.* We have the skills and expertise to help you integrate ESG considerations into your portfolio to achieve these benefits.

* Sources: Callan Investments, 2016 ESG Interest and Implementation Survey; University of Oxford and Arabesque Partners, From the Stockholder to the Stakeholder, March 2015; J.P. Morgan, ESG—Environmental, Social & Governance Investing: A Quantitative Perspective of How ESG Can Enhance Your Portfolio, December 2016.

  • Exclusionary screening
    Do you know what's in your portfolio? Are you investing in companies that don't meet your values or standards? We can answer these questions and more.
  • Thematic investing
    If you’re looking to support a specific social or environmental issue within your portfolio, thematic investing opportunities may be a good fit.
  • Impact investing
    Impact investing may be the most exciting of all the sustainable investing strategies. It‘s intended to generate measurable positive social or environmental impact alongside financial return. Learn more.