On a new episode of the InvestorDaily Uncut podcast, host Maja Garaca Djurdjevic is joined by Jonathan Shead, the head of investment at State Street Global Advisors.

In this podcast, Mr Shead provides a clear definition of ESG and explains how it differs from ethical investing.

He talks about why ESG is all about the way in which environmental, social, and governance factors impact the return of an investment or the risk of that investment.

Ethical investing, he notes, is all about “values” — meaning investors morally want to avoid certain activities or practices.

There is, however, an overlap, he explains.

Mr Shead also talks about how important climate is in ESG portfolios, and why he believes climate will become part of all client discussions in the future.

Other topics discussed include the United Nations’ upcoming global stocktake report and Australia’s net zero journey.