Chapter 17
Ten Issues Surrounding ESG Portfolio Construction
IN THIS CHAPTER
Thinking about scores and materiality
Comparing quantitative and qualitative approaches
Looking at regulations, risks, and rewards
Getting into derivatives, alternative instruments, and stranded assets
Investigating sustainability indexes
In this chapter, you find out about ten issues that are frequently raised around ESG portfolio construction. These issues range from understanding where the differences lie between different rating agencies’ views of ESG scores to using sustainability indexes to represent your exposure to responsible investment.
Reasons for Varying ESG Scores between Rating Agencies
As awareness of responsible investing has grown, several approaches to assess companies’ ESG performance have been developed. The associated rating systems differ by scope, measurement, and weighting of ESG factors, making it challenging to compare methodologies or appreciate why some agencies rate the same company ...
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