ESG integration is the practice of considering environmental, social, and governance factors in the investment process. It can be implemented across all asset classes.
ESG Factors in Investment Analysis
Environmental factors include natural resource management, pollution prevention, water conservation, energy efficiency and reduced emissions, the existence of carbon assets, and adherence to environmental safety and regulatory standards.
Social factors generally pertain to human rights and welfare concerns in the workplace, product development, and, in some cases, community impact.
ESG Implementation Methods
Asset managers and asset owners can incorporate ESG issues into the investment process in a variety of ways.