The ABCs of ESG Investing: Governance
What does ESG mean? ESG investing stands for Environment, Social, and Governance. These are three broad criteria used to analyze stocks to help you create a more ethical portfolio.
What does ESG mean? ESG investing stands for Environment, Social, and Governance. These are three broad criteria used to analyze stocks to help you create a more ethical portfolio.
Thanks to technology and an ever-growing interest in ESG, sustainable investing has become more accessible to anyone who understands the value of the stock market but doesn’t want their money to go to companies with unethical practices or products.
In the past, we were forced to choose between investment performance, or investing with a clear conscience. However, according to a 2019 Morgan Stanley study, there is no financial trade-off in the performance of sustainable funds compared to traditional funds.
If you’ve ever taken time to dissect your retirement accounts, you’ve probably seen your money is invested in a number of different sources, some you may have never even heard of before.
Do you know how many stocks you own? Or the name of every single company you’re invested in? The average investor likely doesn’t know exactly which companies they’re invested in. And while there’s nothing inherently wrong with that, what if you found out that your money was going to a business you morally oppose?
Socially responsible investing, or SRI, means investing in companies that adhere to certain socially conscious business practices, with the purpose of making a positive impact or eliminating a negative impact.