Investment in shares with a good environmental, social, and governance profile, or ESG investment, is one of the trendiest themes in corporate boardrooms and among institutional investors.
In contrast, ESG is much more than just words. According to a new report by the Callan Institute, the adoption of ESG criteria in investment decision-making increased to 42% in 2019, with endowments and foundations leading the way.
The most significant reasons for this increase in interest in ESG investing are covered in the infographic below, An Overview of ESG Investing. The infographic is a good place to start for any investor who wants to learn more about ESG as well as any company aiming to increase its worth and ability to draw in investment capital.
It’s widely acknowledged that Millennials, who already exert a sizable and expanding influence on investing, place a high value on socially conscious business practices. Less well known is the correlation between socially conscious business practices and higher earnings and, thus, better investment prospects.
Regulatory fines, shareholder revolts, public scandals, and other potentially damaging, value-destroying events are less likely to occur for companies with high ESG scores. Companies that treat their employees ethically also enjoy lower employee turnover rates and more motivated, effective workforces. These and other qualities make high-scoring ESG companies ideal long-term investment prospects. Use the companion resource to learn more.