The clue to what “thematic investing” is lies in its name: it’s a reference to strategies that focus on a specific investment theme. And one of the main areas of focus for investors today is sustainability. But how does this approach differ from the more recognisable environmental, social and governance (ESG) investment standard?
ESG investing is the consideration of how environmental, social and governance practices influence the investment decision-making process. ESG can help investors gain a better understanding of the companies in which they invest. Thematic investment should be seen as a complementary tool to already established ESG frameworks.
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