9 reasons why ESG investing is getting popular
Samvat 2080 and winter is around the corner, the air quality is poor and is the focus of discussion everywhere. Therefore, one needs to be cognizant of the fact that ESG is very important in today's context.
ESG is an acronym for Environmental, Social, and Governance (ESG) that socially conscious investors use to select investments.
ESG norms provide a more focussed ideology and specific framework that ensures expected returns.
Environment:
What kind of impact does a company have on the environment? This could be the company’s carbon footprint, toxic chemicals involved in its manufacturing and other processes, and its pursuit of sustainability throughout its supply chain.
Social:
How does the company improve its social impact, both within the company and in the broader community? Social factors would include gender equality, racial diversity in both the executive suite and staff overall and inclusion programs and hiring practices.
Governance:
Governance includes everything from issues surrounding executive pay, diversity in leadership, and transparency with shareholders.
Therefore, ESG is a practical, real-world process for addressing how a company serves all its stakeholders: workers, communities, customers, shareholders, and the environment.
ESG research firms produce scores for a wide range of companies. Those scores provide a clear and handy metric for comparing different investments.
ESG is popular due to the following factors:
1.
It reduces risk and creates value for investors and for companies.
2. It helps regulators to get information and process it as well.
3.
Investors are increasingly choosing to invest in companies that align with their values and goals.
4. Companies that perform well on ESG are less
