Does environmental, social, and governance (ESG) investing add or subtract value from investment portfolios? According to the findings of a trio of researchers, summarized in the new In Practice series, the answer is neither: Investors can both match index performance while also “doing good” for the environment and society.
So what are the risks and opportunities associated with integrating or failing to integrate human rights issues into asset allocation considerations? Anjali Pradhan, CFA, explores the issue.
Women and men want to invest in causes and concerns that matter to them, says Barbara Stewart, CFA. The big opportunity for the financial industry will be to understand these value preferences and to offer the best advice as to how clients can allocate some of these "value investments" via traditional equity markets.
Is shareholder maximization the best way for a company to achieve sustainable success? Are there other parties who should be taken into account? Anjali Pradhan, CFA, tackles the issue in an interview with Robert Walker of NEI Investments.
Taking environmental, social, and governance (ESG) factors into account and avoiding unsustainable investment choices is not a theoretical fad but a robust downside protection mechanism and an attractive outperformance opportunity deserving of attention.
“Beware lest you lose the substance by grasping at the shadow.” The same goes for integrating ESG factors into investing, says Bryan Esterly, CFA.
"Standards for disclosure around material ESG factors by sector are critical. Once we have this, we can start to innovate at a faster rate," says Erika Karp, founder of Cornerstone Capital.
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