ESG stands for Environmental, Social, and Governance, three lenses investors use to evaluate companies beyond short-term profits. ESG criteria help assess how a business handles climate impact, people, and leadership, central to sustainable finance and ethical investing.

The three pillars

Environmental. Carbon emissions, resource use, waste, and transition plans toward a lower-impact economy.

Social. Labor practices, diversity, product safety, supply chain standards, and community impact.

Governance. Board independence, executive pay, transparency, anti-corruption policies, and shareholder rights.

How ESG is used in investing

Research firms score companies and funds on ESG metrics. Investors may screen out controversial sectors, favor leaders, or integrate ESG alongside traditional financial analysis. EU rules (like SFDR) increasingly require funds to disclose how they consider sustainability.

Scores aren't perfect, methodologies differ, and high ESG ratings don't eliminate market or company-specific risk.

ESG and bunq

bunq publishes sustainability commitments and plants trees as you spend. For portfolio-level ESG exposure, explore investments and read more at about/sustainability. Align banking and investing with the impact you want.

Frequently asked questions

Does ESG mean lower returns?

Not necessarily. Many ESG-focused funds perform competitively; outcomes depend on selection and market conditions, not the label alone.

What's the difference between ESG and impact investing?

ESG often screens and weights existing markets. Impact investing targets measurable social or environmental outcomes as a primary goal.

What is greenwashing?

Exaggerating sustainability credentials without substance. Check fund holdings, reports, and third-party ratings rather than marketing alone.