ESG investing evaluates companies on Environmental (carbon emissions, waste, energy use), Social (labor practices, diversity, community impact), and Governance (board independence, executive pay, shareholder rights) criteria alongside traditional financial metrics.
Proponents argue that companies with strong ESG practices face fewer regulatory risks, attract better talent, and create more sustainable long-term value. Critics contend that ESG scores are subjective and can lead to underperformance if they exclude profitable industries.
← Back to all investing concepts