For many investors, the value of their investment no longer deals simply with returns. Over the last few decades, more investors have joined a notion that calls for their money to make a positive impact on the environment, society, and the world.
Along with this growing demand comes new ethical strategies and considerations that come with the investment process. One of which is known as environmental, social, and governance (ESG) investing, which serves as a framework of metrics that investors may look at when screening potential investments.
Some environmental criteria include water usage, waste production and pollution, energy consumption, and other metrics regarding how a company treats the environment around them. Social factors include how well a company treats its clients and workers, especially with regards to compliance to human rights and labor laws. Governance deals with the share class structure and governance structure within the company.