ESG Investing | ESG Services | Deutsche Bank Wealth Management

What is Environmental, Social and Governance investing?

ESG investing is the philosophy that investors should consider the impact that their investment decisions will have on the natural world and on society, as well as any financial gains that they might make.

What is ESG investing?

 

ESG investing means that investors consider environment, social and governance criteria alongside traditional financial factors. It represents a more holistic approach to investing that takes into account our impact on the natural world and society, as well as any potential financial gains.

 

Investors often refer to ESG investing interchangeably with other concepts such as ethical investing, socially responsible investing, green investing, sustainable investing and impact investing. All of these terms describe the idea that finance should support the broad long-term objectives of society rather than simply trying to make profits.

 

However, ESG investing is much broader. It offers both a statement of ambition for the world as it should be and provides objective and rigorous criteria for identifying investments that can help our journey towards these goals.

 

'$35.3 trillion in assets across five of the world’s major markets'

 

By 2020, approximately $35.3 trillion in assets across five of the world’s major markets – Australia & New Zealand, Canada, Europe, Japan and the United States – were invested in accordance with ESG principles, according to data from the Global Sustainability Investment Alliance. This represented a 15% increase over the previous two years. 

What does ESG stand for?

 

ESG stands for “Environmental, Social and Governance”. These three areas sum up the key ways in which we can act to protect the natural world, ensure social progress and improve global governance standards. Each area covers a wide range of ESG factors on which the non-financial performance of a company or an investment project can be measured. 

  1. Environmental factors refer to the impact that a company has on the natural environment. This includes issues such as pollution (carbon emissions, toxic chemicals and metals, packaging and other waste), the use of natural resources (water, land, trees) and the consequences for biodiversity (the variety of life on Earth), as well as attempts to minimise our environmental footprint (energy efficiency, sustainable farming, green buildings).
  2. Social factors are those that affect people – whether employees, customers or society at large. They cover matters such as health and safety for employees or labour and welfare standards for other workers employed in the company’s wider supply chain, as well as product safety for consumers or privacy and data security for its users. Increasingly, investors also want to see that companies are actively committed to overcoming inequality and discrimination, both through fair treatment of employees and ensuring that no social groups are excluded from access to critical products and services.   
  3. Governance factors relate to whether a company manages its business in a responsible way. This takes into account the ethical requirements of being a good corporate citizen, such as anti-corruption policies and tax transparency, as well as traditional corporate governances concerns such as managing conflicts of interest, board diversity and independence, quality of financial disclosures and whether minority shareholders are treated fairly by controlling shareholders.

A brief history of ESG

 

The ideas that underpin ESG investing go back a long way. Leading thinkers and economists have warned of the dangers of environmental damage or the social ills caused by certain products or business practices for many centuries, including the theologian John Wesley (The Use of Money, 1744) and the economist Adam Smith (The Wealth of Nations, 1776). 

 

The first investment vehicle that explicitly identified itself as a “responsible” investor was the US Pioneer Fund, which launched in 1928. This avoided investing in sectors such as alcohol and tobacco. Public discussion about the damage that unchecked economic growth was causing through pollution and environmental degradation began to grow substantially in the 1960s, 1970s and 1980s. 

 

In particular, the foundation of the interdisciplinary Club of Rome network in 1968 and its inaugural report (The Limits to Growth, 1972) attracted considerable public attention. This was a key step in changing the paradigm of how our economic activities interact with the natural world.

 

By the 1990s, the idea that companies, organisations and investors should be taking account of environmental and social costs became more widely recognised, with the arrival of the first “socially responsible” stock index, the Domini 400 Social index, and the “triple bottom line” (also known as TBL and 3BL) or “people, planet, profits” accounting framework, under which organisations began to take account of their social and environmental performance in addition to their financial results. 

 

ESG: a new abbreviation for a new century

 

The formal representation of these issues under the ESG definition began in 2004, when the abbreviation was first used in a report by the United Nations (UN) Environment Programme Finance Initiative (Who Cares Wins, 2004). 

 

Just two years later, the UN launched its “Principles for Responsible Investment”, a framework for incorporating ESG issues into investment. This began with 63 signatories overseeing $6.5 trillion in assets, and had grown to more than 3,000 signatories with more than $100 trillion in assets by 2020.

  

Multinational support for ESG objectives then took a major step forward in 2015, when the 193 countries of the UN General Assembly adopted the UN Sustainable Development Goals (SDGs). These set out 17 interlinked global goals intended to set the world on a path towards a more sustainable and equal future.

 

The SDGs cover a wide range of ESG factors, including the environment (such as tackling climate change and reducing waste), social progress (such as education, health and gender equality) and robust governance (such as developing justice and strong institutions). 

 

Achieving the SDGs could potentially create opportunities worth an estimated $12 trillion by 2030, according to the Business and Sustainable Development Commission.

 

The content and materials on this website may be considered Marketing Material and does not constitute an offer. The market price of an investment can fall as well as rise and you might not get back the amount originally invested.  The products, services, information and/or materials contained within these web pages may not be available for residents of certain jurisdictions. Please consider the sales restrictions relating to the products or services in question for further information. Deutsche Bank does not give tax or legal advice; prospective investors should seek advice from their own tax advisers and/or lawyers before entering into any investment.

 

Explore further

Find out more about how we can help and the ESG investing services we offer in your region.

ESG trends and insights

banner rhiannon davies

Feature article

Does coral have a future? Why all eyes should be on the Maldives in 2024

Time is running out to save the world’s coral reefs, says Professor Callum Roberts, but new findings suggest we can help them to survive climate change

Jan. 24, 2024


CIO ESG Survey 2023 (1)

CIO Special report

ESG Survey 2023: Sustainable transition and investment

Over the last three years, our annual survey has examined our private, business and institutional clients’ attitudes to the multiple dimensions of ESG (environmental, social and governance) investing. This year, we had 1,759 responses to our survey, double the 849 received in 2022.

Nov. 22, 2023


esg desk

CIO Special report

ESG Market Monitor: Q3 2023

Our ESG Market Monitor publication is designed to help you stay informed and up-to-date on the latest developments in environmental, social and governance (ESG) investing and the transition to more sustainable economies.

Nov. 01, 2023


CIO Special | Deutsche Bank Wealth Management

CIO Special report

ESG & investment performance: think strategically

The key to sustained long-term returns from ESG investment is effective strategic asset allocation.

Oct. 24, 2023


DBW Modular Solution

ESG

Our modular approach to investing

We offer a flexible investment portfolio, thoughtfully built around you.

Oct. 20, 2023


CIO Special | Deutsche Bank Wealth Management

CIO Special report

Smart mobility: switch, optimise, prioritise

Once we looked to technology to make transportation systems cheaper, faster or safer. But “smart mobility” needs to be more sustainable too - and the primary challenge may be social in nature.

Oct. 20, 2023


Rainforests: the Earth’s green lung | Deutsche wealth management services

CIO Nature Series

Rainforests: the Earth’s green lung

Rainforests provide invaluable ecosystem services supporting climate management, biodiversity, and rural livelihoods—but they are also fragile. In this publication, we focus on four key concerns: deforestation, climate change, poaching and illegal trade, and mining and oil extraction

Aug. 02, 2023


ff sustainable supply chain

Future Fundamentals podcast

Sustainable value chains

Deutsche Bank Private Bank's ESG CIO Markus Müller and Deutsche Bank Research’s Marion Laboure look at value chains in the global economy – and why there are increasing concerns about their sustainability.

Jul. 13, 2023


cio esg market monitor red

CIO Special report

ESG Market Monitor: Q2 2023

Our ESG Market Monitor publication is designed to help you stay informed and up-to-date on the latest developments in environmental, social and governance (ESG) investing and the transition to more sustainable economies.

Jun. 01, 2023


FISHES

Feature article

Markus Müller on creating the virtuous circle

Markus Müller discusses how the ocean, biodiversity, the global economy and the world of finance are inextricably linked – and proposes what should be done now to make business fit for a nature-compliant future.

May. 22, 2023


Ray collins wave 2

Feature article

Dr Claire Asher: natural born saviours

With multifaceted threats to life on Earth, nature-based solutions are attracting scientists, governments, communities and businesses – by delivering multifaceted results, Dr Claire Asher explains in LUX magazine.

Apr. 27, 2023


love heart wave ray collins

Feature article

Ted Janulis: investing in the big blue

Ted Janulis, founder and Principal at Investable Oceans, speaks to LUX magazine about why the blue economy is making a splash with investors.

Apr. 21, 2023


combustion ray collins copyright red

Feature article

Markus Müller on the nature economy

What if we redesigned our economic model to take into account the cost of using nature? Markus Müller explains how the health of the world's natural capital is something we now have to articulate and factor into all our financial decisions.

Apr. 13, 2023


markus natural capital red

Biodiversity

Markus Müller on natural capital

Markus Müller explores the benefits and necessity of a sustainable economic system based on natural capital.

Feb. 21, 2023


Mangroves: why they need protection | Deutsche wealth management services

CIO Nature Series

Mangroves: why they need protection

Mangroves are highly important for biodiversity and play a crucial role as nature-based solutions to mitigate the effects of climate change, even though they make up less than 1% of all tropical forests worldwide.

Jan. 24, 2023


art of adaptation event still m

Event report and video

The Art of Adaptation: Hybrid Landscapes

At an event hosted in our lounge during Frieze London & Frieze Masters, minds from the worlds of art, science and economics came together to explore what adaptation means in a time of radical change.

Nov. 23, 2022


ESG investment survey 2022

CIO Special report

ESG Survey 2022: Trends and concerns

In this year's survey we asked almost twice as many questions, with the aim of getting a more complete view of our private, institutional and business clients’ attitudes to ESG.

Nov. 08, 2022


Commodities, the energy transition and ESG portfolios | Deutsche wealth management services

CIO Special report

Commodities, the energy transition and ESG portfolios

Energy price volatility has had an obvious impact on ESG portfolios this year, but we also need to consider the longer-term dynamics around energy and commodity markets.

Oct. 19, 2022


Ensuring a sustainable blue economy

CIO Special report

Ensuring a sustainable blue economy

The Ocean provides key ecosystem services that are crucial for human wellbeing and the prosperity of the global economy. Learn more on how a sustainable blue economy could be implemented.

Oct. 14, 2022


Energy and Asia: future challenges | Deutsche wealth management services

CIO Special report

Energy and Asia: future challenges

Our CIO Special looks at the rapidly growing Asian energy market and how policymakers are trying to satisfy growing demand – while also reducing carbon emissions and improving energy security.

Oct. 13, 2022


redd rainforest red

CIO Special report

UNFCCC REDD+ and the power of sovereign carbon

Our CIO Special looks at the rapidly growing voluntary sovereign carbon credit market, reinvigorated by agreement on a new framework for asset issuance.

Oct. 11, 2022


India: on the cusp of energy transition | Deutsche wealth management services

CIO Special report

India: on the cusp of energy transition

In this CIO Special we look at the remarkable progress that India has achieved in its energy transition from fossil-fuel based sources to sustainable and green ones.

Sep. 23, 2022


cio special nbs

CIO Special report

Nature-based Solutions and the climate crisis

Nature-based Solutions (NbS) will help us tackle the climate crisis. But to fully harness their potential, we need a precise conceptual understanding of what they are and the benefits they provide.

Sep. 22, 2022


ocean conference mallorca

Events Highlights

The DB x ORRAA Ocean Conference 2022

Co-hosted by Deutsche Bank and the Ocean Risk and Resilience Action Alliance (ORRAA), the DB x ORRAA Ocean Conference aimed to to demystify the sustainable blue economy and show how private capital can help achieve positive ocean impact at scale.

Sep. 16, 2022


ESG and investment performance: challenges ahead? | ESG investing

CIO Special report

ESG and investment performance: challenges ahead?

After the initial phases of acceptance, then rapid growth, ESG has now entered a new stage centred on performance – both in terms of financial returns and “real world” positive effects. Our latest CIO Special report looks at the changing landscape of ESG investing, what to expect in future and the portfolio management implications.

Jul. 11, 2022


coral rainforest of the sea | The blue economy

CIO Nature Series

Corals: the rainforests of the sea

This introductory guide to the global threats facing coral reefs – and what we can do to reduce them – is part of our new CIO Nature Series providing insights on nature-based solutions to address climate impacts and foster adaptation efforts.

Jun. 24, 2022


ocean’s natural capital | The blue economy

CIO Special report

Ocean finance: redefining the value chain

As we mark the UN’s World Oceans Day for 2022, we face major challenges in building a sustainable blue economy. This CIO Special, produced in collaboration with the Ocean Risk and Resilience Action Alliance (ORRAA), explains how the global financial sector will play an important role in finding solutions.

Jun. 08, 2022


mob nature based solutions

Event report and video

Wealth with Responsibility: The power of nature-based solutions

Harnessing the power of nature could breathe new life into ecosystems, protect communities and transform livelihoods. Watch our exclusive video to hear more about the transformational potential of nature-based solutions from our three expert guest speakers.

May. 05, 2022


Biodiversity: the new playing field for ESG assessment

CIO Special report

Biodiversity: the new playing field for ESG assessment

Our CIO Special looks at likely future trends in ESG assessment and why biodiversity will be an increasingly important consideration.

Mar. 21, 2022


ff reef2

Future Fundamentals Podcast

Nature as a solution: working with nature towards ocean conservation and coastal resilience

Callum Roberts, Chief Scientific Advisor to the Maldives Coral Institute and Professor of Marine Conservation at the University of Exeter, joins Markus Müller, Global Head of the Chief Investment Office at Deutsche Bank’s Private Bank, to discuss how nature-based solutions to environmental challenges could protect, sustain and restore some of the planet’s most threatened eco-systems.

Mar. 14, 2022


Patagonia Park Linde Waidhofer

Feature article

Natural leaders: 40 figures saving the world’s endangered species

The Earth’s biodiversity is vital to us all but it is now under increasing threat. Meet some of the scientists, business leaders and organisations who are taking action.

Jan. 21, 2022


mob wwr nature based solutions

Experts Talk

Biodiversity loss: the next big threat to the planet and your portfolio

Claudio de Sanctis, Head of the International Private Bank and CEO EMEA, Deutsche Bank, was joined by a panel of leading experts at Frieze London 2021 to discuss how a reimagined economic system might arrest – and even reverse – biodiversity loss.

Dec. 10, 2021


Socially responsible investing

ESG

Socially responsible investing: the “S” in ESG

Socially responsible investing (SRI) is the principle that investors should consider the full range of benefits and harms that a business may cause for employees, customers and other members of society.

Nov. 15, 2021


Environmentally responsible investing

ESG

Environmentally responsible investing: the “E” in ESG

The environment factor in ESG investing reflects the impact of a company’s operations on the natural world. This includes any resources it uses, such as water and land, and anything it produces, such as pollution and waste, as well as its effects on oceans and wilderness areas.

Nov. 15, 2021


esg g governance 2022

ESG

Corporate Governance: The “G” in ESG

Corporate governance is concerned with how companies interact with the full range of external stakeholders, including competitors, suppliers, shareholders and governments. It is the most established of the three pillars of ESG investing.. read more

Nov. 15, 2021


Natural capital and biodiversity: measurement and investment | Deutsche wealth management services

CIO Special report

Natural capital and biodiversity: measurement and investment

Our special report looks at the topic of biodiversity from a natural capital perspective, and provides insights into how we can start to tackle the “triple planetary crisis” around climate, nature and pollution. With a preface by Professor Sir Partha Dasgupta, Frank Ramsey Professor Emeritus of Economics at the University of Cambridge.

Oct. 12, 2021


“Nature offers strong answers to our biggest problem” | WERTE - Deutsche Bank Wealth Management

ESG

Markus Müller and Muriel Danis: “Nature offers strong answers to our biggest problem”

Muriel Danis and Markus Müller explain the value chain of ESG investment and why banks play a crucial role in economic transformation towards sustainability.

Oct. 12, 2021


CIO Special Coastlines In Crisis

CIO Special report

Coastlines in crisis: key risks from rising oceans

Rising seas will compound other effects from climate change and ocean degradation. They will have major implications for the overall macroeconomic and policy outlook, and for investment.

Sep. 01, 2021


CIO Infrastructure tech esg

CIO Special report

Rethinking infrastructure: technology and ESG

Infrastructure needs are massive across both developed and emerging economies. Our new CIO Special report looks at infrastructure trends and considers infrastructure in a sustainability context.

Jun. 30, 2021


CIO biodiversity Deutsche

CIO Special report

Biodiversity loss: recognising economic and climate threats

Our latest CIO Special looks at the importance of biodiversity and presents the results from our survey of investor attitudes towards environmental, social and governance (ESG) investing.

May. 18, 2021


ESG underwater still

ESG

ESG investing: a "huge opportunity"

Environmental, Social and Governance (ESG) investing, once dismissed as eccentric, now represents a “huge opportunity”.

Mar. 17, 2021


Blue economy 2022 | Wealth Management Services | Deutsche Bank

CIO Special report

Empowering the blue magic: act today for tomorrow

Our new CIO ESG Special provides an intuitive and easy-to-use summary of our previous special report on the blue economy.

Mar. 13, 2021


CIO ESG Asia

CIO Special report

Asian growth needs ESG

Our latest report discusses the development of ESG investing in Asia as well as the challenges and opportunities ahead.

Feb. 26, 2021


Jorg Eigendorf amazon rainforest

Interview

Jörg Eigendorf on incentivising sustainability

Jörg Eigendorf, Head of Corporate Communications, Social Responsibility and Sustainability at Deutsche Bank, talks about the unique role banks can play to incentivise sustainable investment and consumption.

Dec. 23, 2020


coral blue economy deutsche bank

Future Fundamentals Podcast

Biodiversity loss: how many extinctions add up to economic collapse?

Acclaimed marine biologist and coral expert Kristen Marhaver joins Markus Müller, head of the Chief Investment Office at Deutsche Bank's International Private Bank, for the first episode of our Future Fundamentals podcast, designed to explore the long-term investing implications of today's key issues.

Dec. 18, 2020


Global sustainability history | ESG trends | Deutsche bank

CIO Special report

Exploring the E, S and G in ESG

Our new CIO Special report looks at the history of global sustainability initiatives, for example around climate change, biodiversity and the blue economy. Read more..

Dec. 05, 2020


Blue economy deutsche bank

Event report and video

Wealth with Responsibility: Healing and Preserving Our Oceans

The sea is in peril but hope remains. This was the overarching message at a virtual event held on Tuesday November 10 that brought together leading thinkers in ocean conservation and the blue economy.

Nov. 13, 2020


Biodiversity | Blue economy report

CIO Special report

Understanding the blue economy

In this special report we look at what exactly the blue economy is, and why it remains crucial for biodiversity and the sustainability of global economic development.

Nov. 10, 2020


See more

×