Redefining Investment Success: The Influence of ESG Integration on Impact Investing

Purpose - This study examines how ESG (Environmental, Social, and Governance) integration influences investment performance and decision-making. It is assumed that the ESG integrated impact investments will have long-run risk-adjusted returns far better than the traditional investments, while also making a positive impact on the social and environmental realms. The research will analyse most of the features: those that contribute to the financial viability of ESG- integrated investments, the investors' attitude toward the ESG factors, and the interplay between regulatory frameworks and trends in impact investing. Methodology - This study will use a secondary data analysis of financial reports, ESG indices, returns from impact investment funds, and industry research. The analysis will involve the relationship between the ESG integration spectrum, and the investment performance traced through the data from the global financial database, regulatory reports, and publicly listed market reports. Analytical techniques will attribute a statistical measure to risk-adjusted returns and compare ESG- integrated portfolios with more conventional ones. Findings - Through an empirical investigation, the study results ought to formulate whether ESG- driven investments garner benefits in terms of better risk-adjusted returns, concurrently creating some social and environmental benefits. Practical Implications - The results will expose investors to the financial viability of ESG- integrated investments and their investment policies directing towards sustainable finance. Social Implications - The study sees its findings as opening responsible investment practices that can make a difference to sustainability in financial markets through exploring ESG's role in investment decisions. Originality/value - The research provides unique empirical insight into the effect of ESG integration on the success of investments and focuses on the interests of investors, policymakers, and researchers.