What Is ESG Investing And 5 Reasons Why It Is A Bad Idea

Stocks have been one of the best assets to buy due to their liquidity, returns, and availability.

An increasing number of investors also want to encourage companies to focus on environmental and social issues making a positive impact on the world.

What Is ESG Investing?

 Individuals invest in companies upholding the ESG principles striving to make the world a better place.

Socially Responsible Investing (SRI) is similar to ESG investing, with a lot of overlap in their ideologies.

Difference Between ESG Investing And Socially Responsible Investing?

How Are ESG Scores Calculated?

Companies are ranked based on their environmental, social, governance impacts and assigned a score known as the ESG score.

ESG Investing Trends

Many clients are concerned with environmental and social impacts. So naturally, they want to also invest in line with their principles. As a result, ESG Investing has exploded.

What Are The Benefits Of ESG Investing?

Some of the most commonly mentioned benefits of ESG investing are 1. Helping environmental and ecological causes.

Reasons Why ESG Investment Funds Are Not Effective

ESG Principles Are Not Cheap Over the long run, stock prices tend to reflect the amount of profit a company makes. 

ESG Funds Are Actively Managed

Based on the ESG scores, a fund manager actively makes buying and selling decisions.  Besides the tax implications, you also have higher fees to pay for the active management efforts

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