ESG investing, or investing in equities with favorable environmental, social, and governance profiles, is one of the trendiest issues in corporate boardrooms and among institutional investors.
However, ESG is much more than just words. According to a recent report by the Callan Institute, the adoption of ESG criteria in investment decision-making increased to 42% in 2019, with endowments and foundations leading the way.
The increased interest in ESG investing can be attributed to a number of factors, the most important of which are detailed in the infographic below, An Overview of ESG Investing. The infographic is a great place to start for any investor interested in learning more about ESG, as well as any company looking to increase its value and capacity to attract investment money.
It is widely acknowledged that Millennials, whose influence on investing is already large and growing, place a high value on socially responsible corporate practices. What is maybe less well recognized is how socially responsible business behavior leads to increased profitability and, as a result, a better investment opportunity.
This is where the infographic comes in handy. Regulatory fines, shareholder revolts, public scandals, and other potentially damaging, value-obliterating events are less likely for companies with high ESG scores. Furthermore, organizations that treat their employees in a socially responsible manner have lower employee turnover and more engaged and productive staff. These and other characteristics make high-scoring ESG companies ideal long-term investment possibilities. Continue reading to learn more.