ESG Investing | Environmental, Social, and Governance

ESG Meaning: What is ESG?

Environmental, social, and governance (ESG) investing is an investing philosophy where standards of social responsibility are considered when evaluating a company for investment, rather than only maximizing return on investment.

Environmental criteria refers to how well a company performs with respect to their environmental impact.  

Social criteria refers to how a company manages relationships with employees, customers, and the communities in which it operates.

Governance criteria refers to a company’s leadership, executive pay, and shareholder rights.

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ESG Investors

The purpose of ESG criteria is to allow investors to identify and invest in socially conscious companies. 

Investors, particularly newer and younger investors, are increasingly looking to put money only into companies with values that match their own, which is why ESG investing is also sometimes called sustainable investing, responsible investing, impact investing, or socially responsible investing. 

According to the US SIF Foundation, investors in 2018 held approximately $11.6 trillion in assets meeting ESG criteria, which is up from $8.1 trillion just two years prior. 

In response, more brokerage firms and mutual fund companies have begun offering ESG compliant ETFs and other financial products.

ESG Companies

Many companies are moving more towards meeting ESG criteria as more investors are trying to align their investments with their values. 

Here are a few companies ranking high in the ESG criteria:

  1. Edwards Lifesciences
  2. Equinix
  3. Prologis
  4. Emcor Group
  5. Cadence Design

According to the US SIF Foundation, investors in 2018 held approximately $11.6 trillion in assets meeting ESG criteria, which is up from $8.1 trillion just two years prior.

In response, more brokerage firms and mutual fund companies have begun offering ESG compliant ETFs and other financial products.

(Source: https://www.investors.com/research/best-esg-companies-top-stocks-environmental-social-governance-values/)

ESG Investing FAQs

ESG stands for environmental, social, and governance investing.
Environmental, social, and governance (ESG) Investing is an investing philosophy where standards of social responsibility are considered when evaluating a company for investment, rather than only maximizing return on investment.
Investors, particularly newer and younger investors, are increasingly looking to put money only into companies with values that match their own, which is why ESG investing is also sometimes called sustainable investing, responsible investing, impact investing, or socially responsible investing.
The purpose of ESG criteria is to allow investors to identify and invest in socially conscious companies.