Chapter 1

Entering the World of ESG Investing

IN THIS CHAPTER

Bullet Introducing the basic features of the ESG landscape

Bullet Defining what ESG is and isn’t

Bullet Looking at ESG’s effects on the environment, society, and governance

Bullet Using international norms to figure out ESG goals

The acronym ESG has undoubtedly become one of the hottest topics in investment management in recent years. Google searches for the term “ESG investing” have grown exponentially in the last three years, so it’s certainly caught people’s attention! (Don’t believe me? Just look at Figure 1-1.) As a result, executive management has a range of new stewardship topics to contend with, now that global warming issues have created ‘E’nvironmental concerns, and the COVID-19 pandemic has further highlighted ‘S’ocial issues. (Corporate ‘G’overnance issues have always been closely monitored by the investment community.)

But what’s all the fuss about? Is ESG investing a passing fad or a long-term trend that will dominate investment management for the foreseeable future? This chapter looks at the fundamentals behind ESG investing, highlights ...

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