19/09/2022
Environmental, Social, and Governance ( ) Principles and Criteria are a set of standards for a companyβs behavior used by socially conscious investors to screen potential investments.
Key points to know:
Environmental, social, and governance (ESG) criteria are used to screen investments based on corporate policies and to encourage companies to act responsibly.
Many mutual funds, brokerage firms, and robo-advisors now offer investment products that employ ESG criteria.
ESG criteria can also help investors avoid investment losses when companies engaged in risky or unethical practices are held accountable.
The rapid growth of ESG investment funds in recent years has led to claims that companies have been insincere or misleading in touting their ESG accomplishments.
Investors have, in recent years, shown interest in putting their money where their values are.