Over the past three decades, socially responsible investing has shifted from the periphery to the very center of the capital markets under the banner of ESG. “Environmental, Social and Governance” describes a set of measures used to evaluate company commitments as well as a philosophy of investing. Trillions of dollars have been invested in ESG mutual funds and ETFs (exchange-traded funds) in recent years. ESG funds often implement a screen such that they only invest in corporations that exceed some threshold on ESG metrics. They may also use ESG criteria in how they vote their shares.
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