If you own stocks, chances are good you have heard the term ESG. It stands for environmental, social and governance, and it’s a way to laud corporate leaders who take sustainability – including climate change – and social responsibility seriously, and punish those who do not.
In less than two decades since a United Nations report drew attention to the concept, ESG investing has evolved into a US$35 trillion industry. Money managers overseeing one-third of total U.S. assets under management said they used ESG criteria in 2020, and by 2025 global assets managed in portfolios labeled “ESG” are expected to reach $53 trillion.
These investments have gained momentum in part because they cater to investors’ growing desire to have a positive impact on society. By quantifying a company’s actions and outcomes on environmental, social, and governance issues, ESG measures offer investors a way to make informed trading decisions.
This article was originally posted on theconversation.com