Financial Analysis. Lesson 24. Environmental, Social, and Governance (ESG) Investing
Financial Analysis. Lesson 24. Environmental, Social, and Governance (ESG) Investing
ESG investing considers environmental, social, and governance factors in investments.
Sustainable investing seeks long-term value by prioritizing ethical company practices.
Environmental criteria evaluate a company’s impact on natural resources and climate.
Social criteria assess how a company treats employees, customers, and communities.
Governance criteria examine corporate structure, ethics, and shareholder rights.
Carbon footprint measures greenhouse gas emissions from a company's operations.
Green bonds finance projects that promote environmental sustainability and resilience.
Corporate social responsibility (CSR) aligns business operations with social welfare goals.
Impact investing seeks measurable social or environmental impact alongside financial returns.
Climate risk addresses financial risks linked to climate change impacts.
Diversity and inclusion initiatives foster a more equitable workplace environment.
Board independence ensures board members act in shareholders’ best interests.
ESG disclosure requires transparency in reporting environmental, social, and governance metrics.
Sustainable development goals (SDGs) guide responsible investing with global sustainability targets.
Carbon credits allow companies to offset emissions by supporting green projects.
Greenwashing involves misleading claims about a company’s environmental practices.
Ethical investing avoids companies that conflict with investors' moral values.
Renewable energy investments fund sustainable energy sources like solar and wind power.
Negative screening excludes investments based on harmful practices or industries.
Positive screening selects investments that meet specific ethical or sustainable criteria.
Technical Examples:
Carbon footprint analysis helps investors assess environmental impact of businesses.
Green bonds fund eco-friendly initiatives, promoting sustainability in finance.
ESG disclosure ensures companies report on non-financial performance transparently.