What is ESG & why is it important?

ESG is a system for how to measure the sustainability of a company or investment in three specific categories: environmental, social and governance. Socially responsible investing, ethical investing, sustainable investing and impact investing are more general terms.

What is ESG investing?

“At its core, ESG investing is about influencing positive changes in society by being a better investor,” says Hank Smith, head of investment strategy at The Haverford Trust Company. According to Smith, ESG investing assumes that there are certain environmental, social and corporate governance factors that impact a company’s overall performance.

What are ESG assets?

Other ESG assets may focus on components of ESG investing, such as lowering carbon emissions, improving worker equity, gender diversity, minority empowerment, greater board diversity, investing in green projects, and ethical labor management. Most screeners assign a company an ESG score.