The acquisition of shares with a strong environmental, social, and governance profile, or ESG investment, is one of the most hotly debated themes in company boardrooms and among institutional investors.
ESG, however, goes far further than merely speaking words. According to a new Callan Institute report, endowments and foundations incorporated ESG criteria in investment decision-making at a rate of 42% in 2019.
The main reasons for this increase in interest in ESG investment are covered in the infographic below, titled An Overview of ESG Investing. The infographic is a good place to start for any investor who wants to understand more about ESG as well as any company trying to increase its worth and potential to draw in investment capital.
It is generally known that Millennials, who already have a sizable and expanding influence on investment, give highly valued consideration to the conduct of businesses. Less is known about the relationship between socially conscious business activities and higher profits and better investment possibilities.
Regulatory fines, shareholder revolts, public scandals, and other potentially damaging, value-destroying events are less likely to occur for companies with high ESG scores. Employers who prioritize ethics have reduced employee turnover rates and more motivated, effective workforces. These and other traits make high-scoring ESG companies the finest long-term investment prospects. Consult the relevant resource to learn more.