ESG (Environmental, Social and Governance) investing refers to a class of investing that is also known as “sustainable investing.” This is an umbrella term for investments that seek positive returns and long-term impact on society, environment and the performance of the business.
Why is ESG important? ... Investors are increasingly considering ESG issues to help manage investment risks. ESG performance ratings and reports show investors a company's efforts to mitigate risks and generate sustainable long-term financial returns.
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.