Environmental, social, and governance (ESG) investment is a type of investment that considers the environmental, social, and governance factors of a company in addition to its financial performance.
ESG factors are used to evaluate a company’s sustainability and ethical practices. Environmental factors include a company’s impact on the environment, such as its greenhouse gas emissions and water usage. Social factors include a company’s relationships with its employees, customers, and suppliers, as well as its impact on the community. Governance factors include a company’s leadership, board structure, and executive compensation.