Environmental, social, and governance

Environmental, social, and governance (ESG) is shorthand for an investing principle that prioritizes environmental issues, social issues, and corporate governance.[1] Investing with ESG considerations is sometimes referred to as responsible investing or, in more proactive cases, impact investing.[1]

The term ESG first came to prominence in a 2004 report titled "Who Cares Wins", which was a joint initiative of financial institutions at the invitation of the United Nations (UN).[2] By 2023, the ESG movement had grown from a UN corporate social responsibility initiative into a global phenomenon representing more than US$30 trillion in assets under management.[3]

Criticisms of ESG vary depending on viewpoint and area of focus. These areas include data quality and a lack of standardization; evolving regulation and politics; greenwashing; and variety in the definition and assessment of social good.[4]

  1. ^ a b Gelles, David (28 February 2023). "How Environmentally Conscious Investing Became a Target of Conservatives". The New York Times. ISSN 0362-4331. Retrieved 2 March 2023. ... investing principle known as E.S.G. — shorthand for prioritizing environmental, social and governance factors
  2. ^ "Who Cares Wins – The Global Compact Connecting Financial Markets to a Changing World" (PDF). UN Environment Programme – Finance Initiative. Archived (PDF) from the original on 1 September 2022. Retrieved 21 May 2022.
  3. ^ "Global Sustainable Investment Review 2022" (PDF). Global Sustainable Investment Alliance (GSIA). Archived (PDF) from the original on 23 May 2024. Retrieved 23 May 2024.
  4. ^ Hardyment, R. (2024). Measuring Good Business: Making Sense of ESG Data. Abingdon, Oxon: Routledge. ISBN 978-1032601199.

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