Other studies have found that ESG investments can outperform conventional ones. JUST Capital ranks companies based on factors such as whether they pay fair wages or take steps to protect the environment.
The Best ESG Funds For Great Returns & Low Costs
- How ESG Funds Work.
- Vanguard FTSE Social Index Fund (VFTAX)
- iShares MSCI USA ESG Select ETF (SUSA)
- Parnassus Core Equity Investor (PRBLX)
- iShares Global Clean Energy ETF (ICLN)
- Shelton Green Alpha Fund (NEXTX)
- 1919 Socially Responsive Balanced Fund (SSIAX) More items...
A key strategy of sustainable and responsible investing is incorporating environmental, social and corporate governance (ESG) criteria into investment analysis and portfolio construction across a range of asset classes. ... This also includes avoiding companies that do not meet certain ESG performance thresholds.
Environmental, Social, and Corporate Governance (ESG) data refers to metrics related to intangible assets within the enterprise. Research shows that intangible assets comprise an increasing percentage of future enterprise value. While there are many ways to think of intangible asset metrics, these three central factors together, ESG, comprise a label that has been adopted throughout the United States financial industry. They are used for a myriad of specific purposes with the ultimate objective of measuring elements related to sustainability and societal impact of a company or business.
ESG stands for Environmental, Social, and Governance. Investors are increasingly applying these non-financial factors as part of their analysis process to identify material risks and growth opportunities.