In a world that’s increasingly conscious of the environment, social justice, and corporate transparency, ESG investing has become more than just a trend. It’s a movement—and for many, a fundamental part of a modern, balanced portfolio. ESG stands for Environmental, Social, and Governance, and investing in companies that meet these criteria can have real financial, social, and long-term personal value.
If you’re building a future-forward portfolio or considering launching your investment journey through a legal entity, here are four powerful truths you should know about ESG investing—and how to integrate it effectively into your Investment Purpose Vehicle (IPV) with Investor 2.0.
1. ESG can enhance long-term returns
Many investors used to believe that aligning portfolios with ethical principles would sacrifice performance. But this outdated view has been consistently debunked.
Numerous studies, including those from Morgan Stanley and BlackRock, show that ESG-aligned portfolios often perform on par with or even outperform their non-ESG counterparts over the long term. The reason is simple: companies tend to manage risk more prudently, adapt to regulatory changes more efficiently, and maintain stronger brand loyalty with customers and employees.
For example:
- Environmental metrics like carbon footprint and energy efficiency often reflect how well a company manages its operational costs.
- Social policies like fair labour practices and community impact reduce reputational and legal risks.
- Governance standards like board diversity and anti-corruption measures contribute to long-term shareholder trust and transparency.
In short, ESG investing doesn’t mean giving something up—it often means adding stability, growth potential, and risk management into your portfolio.
2. ESG ratings are not always standardised
One challenge ESG investors face is the lack of uniformity in ratings across agencies. A company might receive a high rating from MSCI but a much lower one from Sustainalytics. That’s because each provider uses its own methodology to assess what matters most.
For instance, some rating systems might penalise a company for operating in an emissions-intensive industry, while others reward that same company for making measurable improvements. This inconsistency can lead to confusion and misaligned investments.
To counter this, investors should:
- Understand the rating methodology used by different agencies.
- Use multiple data sources when evaluating companies.
- Consider working with advisors or investment platforms that offer curated screening tools.
If you’re building your portfolio through Investor 2.0’s IPV, you can take advantage of dedicated support and third-party analysis tools offered via our brokerage partner, Estably. This ensures that your decisions are backed by real data and thoughtful evaluation.
3. Investing fits naturally into a legal entity
Whether you’re an active trader or a long-term investor, setting up a legal entity like an Investment Purpose Vehicle (IPV) can unlock tax benefits, reduce liability, and make your financial life more structured. And ESG investing? It fits beautifully into this framework.
Here’s how:
- Tax deferral: In Estonia, where your IPV is registered, corporate tax is only triggered when profits are distributed. This means you can reinvest gains without immediate tax pressure.
- Clear asset separation: Keeping your investments in a legal entity separates your portfolio from personal liabilities or complications.
- Intergenerational benefits: You can transfer ownership of your IPV, including the investments it holds, to someone you trust without liquidating assets.
- Built-in compliance: Your IPV comes with automatic accounting, annual reports, and LEI renewal—everything that helps you remain compliant with financial regulations.
It’s a clean, flexible container for thoughtful, sustainable investing.
4. How to build an ESG portfolio inside an IPV
If you’re wondering how to translate ESG intentions into a real, working investment strategy inside your IPV, here are a few concrete ways to do it:
Example 1: ESG-compliant ETFs
Exchange-traded funds (ETFs) like the iShares MSCI Europe SRI UCITS ETF or the Vanguard ESG International Stock ETF are great starting points. They provide diversified exposure to companies with strong ESG scores, minimising single-stock risk and making ESG investing more accessible.
Example 2: Green bonds and sustainable funds
Fixed income investors can consider green bonds or sustainability-linked funds. These instruments fund projects like renewable energy, sustainable agriculture, or low-carbon transport while paying interest back to your legal entity.
Example 3: Sector exclusions
Another route is negative screening—avoiding companies involved in fossil fuels, firearms, tobacco, or gambling. Many ESG investors set custom filters in their brokerage accounts to stay aligned with personal or corporate values.
Example 4: Individual ESG leaders
If you prefer picking stocks, choose companies that are recognised ESG leaders. For instance, Salesforce, Orsted, and Unilever regularly rank high on ESG benchmarks.
Bonus: Work with an advisor
Investor 2.0’s partner Estably offers access to brokerage accounts tailored for IPVs. They can help filter investments based on ESG criteria and provide guidance on compliance and reporting.
The best part? You do this inside a single entity with integrated accounting, brokerage access, and compliance support—saving you time, reducing your admin load, and keeping your investments structured and tax-efficient.
The future of investing has a conscience
ESG investing is no longer just a niche for ethically-minded investors. It’s a mainstream, data-supported, and increasingly profitable strategy that also happens to align with values many investors care about.
And with Investor 2.0’s Investment Purpose Vehicle, it’s easier than ever to build a sustainable, diversified portfolio inside a legal entity that works for you, not the other way around.
You can start today by opening a free account and clicking “IPV Sign Up” from the left-hand menu. Or, if you want to understand how ESG investing and IPVs can fit your unique situation, book a 30-minute call with our team.
The tools are ready. The structure is simple. And the future? It’s looking green.
