ESG stands for environmental, social and governance. These are called pillars in ESG frameworks and represent the 3 main areas that companies are expected to report in. The goal of ESG is to capture all the non-financial risks and opportunities inherent to a company’s day to day activities.
Opponents say ESG investments allocate money based on political agendas, such as a drive against climate change, rather than on earning the best returns for savers. They say ESG is just the latest example of the world trying to get “woke. “Proponents believe that by buying company stocks that have a high ESG rating they help the world.