Many believe this new focus, is due in part to the millennial generation who care about what their money supports and wish to invest in the way they live. They want to support companies that meet ESG criteria. I believe many of us, young and old hold a great concern for environmental standards, ethical practices, and transparency.
Environmental, Social and Governance Investing has become of paramount importance to us. Especially for future generations as we continue to favor companies that actively uphold the best practices on ESG issues.
Here are some criteria used to determine ESG practices:
A company’s energy use, pollution, waste, animal treatment and natural resource conservation are evaluated to determine how environmental risks might affect a company’s income. And how they are handling these risks responsibly.
A company that upholds high values and practices in its management of employees, suppliers, customers and their community. Such as, concern for their employee’s health and safety. A willingness to donate a percentage of profits back to the community and respect for their stakeholder’s interest.
Outstanding leadership. Transparency in accounting. Stockholders right to vote on important issues. And no engagement in illegal behavior or use of political contributions to obtain special treatment.
Keep in mind these criteria are subjective. So as an investor you would need to do the research to find investments that match your personal values. Talk to your financial professional to see if incorporating ESG principles into your portfolio would benefit your future investments.
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