September 2021

ESG Epiphany

Investor interest in climate change, social justice, and corporate power has been making its presence known in the capital markets for some time and has recently seen a significant uptake. These ESG (Environmental, Social, and Governance) factors are increasingly being identified, evaluated, and scored as a premise for investment in particular companies, as well as being used to avoid certain companies and industries.

“Environmental” can encompass everything from energy use, water conservation, pollution, waste management, and carbon footprint. “Social” pertains to diversity among employees and executives, inclusionary policies, pay equity, labor standards, health and safety, privacy, and human rights. Lastly, “governance” includes evaluating the self-interest of managers versus the stakeholders in the company, such as board compensation and structure, compliance, executive compensation, and bribery or corruption.

Rosa Y.C. Chen

Head of Research & Portfolio Manager