What is the definition of ESG?
ESG means using Environmental, Social and Governance factors to evaluate companies and countries on how far advanced they are with sustainability. Once enough data has been acquired on these three metrics, they can be integrated into the investment process when deciding what equities or bonds to buy.
If asked, most investors like the idea of ESG. However, fund managers know this, as such, they want to promote ESG to help sell funds. If ESG is important to you, you’ll need to carry due diligence. You may have heard of the term ‘green washing’