One of the hottest topics in corporate boardrooms and among institutional investors is ESG investment, or investing in shares with favorable environmental, social, and governance profiles.
ESG, on the other hand, is much more than simply words. The adoption of ESG criteria in investment decision-making climbed to 42 percent in 2019, according to a recent analysis by the Callan Institute, with endowments and foundations leading the way.
A variety of causes have contributed to the rising interest in ESG investing, the most important of which are explained in the infographic below, An Overview of ESG Investing. Any investor interested in understanding more about ESG, as well as any firm trying to raise its value and capacity to attract investment money, should start with the infographic.
It is commonly accepted that Millennials, who already have a substantial and growing influence on investing, place a high value on socially responsible corporate activities. What’s less generally known is how socially responsible company behavior leads to higher profits and, as a result, better investment opportunities.
The infographic comes in handy in this situation. Companies with high ESG scores are less likely to face regulatory fines, shareholder revolts, public scandals, and other potentially negative, value-destroying events. Additionally, companies that treat their employees with social responsibility have reduced employee turnover and a more engaged and productive workforce. Companies that score high in ESG are optimal long-term investment opportunities because of these and other characteristics. To learn more, reference the accompanying resource.