As the founding chairman of the all-party parliamentary group on environmental, social and governance, I am delighted to have secured the first ever debate on environmental, social and governance developments in the UK in this place. I refer the House to my entry in the Register of Members’ Financial Interests and to the all-party group’s interests as well.

ESG is a set of characteristics that can be used to assess the non-financial elements of an investment or business decision. In its simplest form, ESG is a way to take into account potential risks and rewards that might not be obvious from a balance sheet. Everyone, in their own way, incorporates ESG criteria into each and every economic decision, even if unknowingly.

For instance, the property developer does not buy land next to a crumbling cliff; a family might choose not to go to a particular shop because they have heard that it treats its employees badly; or a woman might change jobs to work for a firm that is fighting the gender pay gap. ESG is simply the use of non-financial criteria in decision making—a way for investors, companies and individuals to get a bigger picture of the impact of their investments, which will help them better understand the risks and, more importantly, the rewards.

Recently, there has been much debate about ESG, as it has risen in prominence. The number of ESG assets under management has grown by more than 150% since 2015, with global ESG assets expected to exceed £41 trillion or about four times the value of all the assets held in the UK. They will also account for a third of all assets under management by 2025. This scale-up has been met with some concern about ESG perhaps having some underlying political current. This is wrong. In its true form, ESG is simply an investment strategy—one that, like all investment strategies, aspires to low risk and high return. ESG is not a political stance, a way of life or a mantra for investors, although of course in some situations it is unfortunately used wrongly to pursue certain political agendas. In others, it is seen as shorthand for ethical or impact investing. However, it is neither.

In this debate, I will be sticking to our definition of ESG as an investment strategy and hoping to make the case to Government for why we should be encouraging it, what problems we have to overcome and how best to claim the crown, and the associated benefits, as the world leaders of ESG investing.