Your guide to investing for a more sustainable world

Investing in one's own future has always been a good financial move. But what if you want to ensure that the companies you have a financial interest in are also helping to improve the present and future of all of us--and of the planet? More than ever before, sustainable investors want to be confident that a company's Environmental (net zero emissions target), Social (response to the Covid-19 pandemic), and Governance (no repeats of Enron and WorldCom) policies and actions are positively impacting the global outlook--and to identify ways that their dollar can incentivize business leaders to do even better. The worldwide rise of an Environmental, Socially Responsible, and Governance (ESG) approach to investing shows you're not alone, and the $30+ trillion--and growing--committed in this way says it's already become a transformative global movement. ESG provides a framework for evaluating companies that, unlike unrelated investment strategies, informs and guides sustainable investment.

Even if you're a novice investor, ESG For Dummies will allow you to hit this new investing landscape running, providing you with measurable ways to factor ESG into company performance, see how these are reflected in your investment return, and show how you can monitor companies to ensure your money is being put to ethical use. You'll also become familiar with the big names to follow in the ESG world, how they're already effecting positive change, and how you can help.

• Identify the drivers for each category of ESG
• Define and measure material ESG factors for investing success
• Understand principles for building a diversified sustainable portfolio

• Recognize material ESG factors effect on company performance

  ESG investing introduces powerful tools to do real and lasting good: this book shows you how to use them to help make everyone's future, including your own, much more secure.

  Autorentext

  Brendan Bradley is co-author of FinTech For Dummies. He fosters and develops support for new ­investment areas, including AI-assisted research for automated modeling and transforming ­unstructured financial content in the ESG ecosystem.

  Klappentext

  Your guide to investing for a more sustainable world Investing in one's own future has always been a good financial move. But what if you want to ensure that the companies you have a financial interest in are also helping to improve the present and future of all of us--and of the planet? More than ever before, sustainable investors want to be confident that a company's Environmental (net zero emissions target), Social (response to the Covid-19 pandemic), and Governance (no repeats of Enron and WorldCom) policies and actions are positively impacting the global outlook--and to identify ways that their dollar can incentivize business leaders to do even better. The worldwide rise of an Environmental, Socially Responsible, and Governance (ESG) approach to investing shows you're not alone, and the $30+ trillion--and growing--committed in this way says it's already become a transformative global movement. ESG provides a framework for evaluating companies that, unlike unrelated investment strategies, informs and guides sustainable investment. Even if you're a novice investor, ESG For Dummies will allow you to hit this new investing landscape running, providing you with measurable ways to factor ESG into company performance, see how these are reflected in your investment return, and show how you can monitor companies to ensure your money is being put to ethical use. You'll also become familiar with the big names to follow in the ESG world, how they're already effecting positive change, and how you can help. Identify the drivers for each category of ESG Define and measure material ESG factors for investing success Understand principles for building a diversified sustainable portfolio Recognize material ESG factors effect on company performance ESG investing introduces powerful tools to do real and lasting good: this book shows you how to use them to help make everyone's future, including your own, much more secure.

  Inhalt

  Introduction 1

  About This Book 1

  Foolish Assumptions 2

  Icons Used in This Book 3

  Beyond the Book 3

  Where to Go from Here 3

  Part 1: Getting to Know ESG 5

  Chapter 1: Entering the World of ESG Investing 7

  Surveying the Current ESG Landscape 8

  Exploring What ESG Is (and Isn't) 9

  Defining the breadth of ESG 10

  Comparing SRI, ethical, and impact investing to ESG 14

  Determining whether ESG delivers good investment performance 16

  Understanding ESG's Impact on the Environment, Society, and Governance 17

  Meeting environmental and global warming targets 17

  Providing solutions to social challenges 18

  Meeting corporate governance requirements 18

  Using International Standards to Determine ESG Objectives 19

  Leading the charge: European legislation on ESG 20

  Ahead of its time: The United Nations 21

  Staying focused: The Sustainability Accounting Standards Board 21

  Building a framework: The Global Reporting Initiative 22

  Chapter 2: Back to the Future: Understanding the Evolution and Growth of ESG Investing 23

  Studying the Evolution of Investing in ESG 24

  Investing through the ages: From SRI to ESG 24

  Go green: The changing global environment 27

  On trend: Changing investor demographics 28

  Crunch the numbers: Evolving data and analytics 29

  Exploring the "Personality" of an ESG Company 31

  Determining material ESG factors 31

  Performing a materiality analysis 32

  Applying weights to materiality measures 33

  Understanding Why ESG Is Important 34

  Global sustainability challenges 35

  The interest of millennial investors in ESG 35

  More systematic, quantitative, objective, and financially relevant approaches 36

  Surveying Specific ESG Ratings and Metrics 36

  Data quality, ratings bias, and standardization 37

  Issues with ESG scoring 38

  ESG momentum importance 39

  Applying artificial intelligence and data science to ESG analysis 39

  Defining an ESG Policy 40

  Familiarize yourself with ESG and asset owner-specific legislation 40

  Undertake a peer review 41

  Review your statement of investment beliefs and core investment principles 41

  Specify responsible investment guidelines 41

  Outline responsible investment procedures 42

  Include engagement and active ownership approaches 42

  Spell out reporting requirements 43

  Chapter 3: Give Me an 'E'! Defining the Environmental Sector in ESG 45

  Outlining a Company's Use of Natural Resources 46

  CO2 or GHG? Climate change and carbon emissions 46

  Clean and green: Energy efficiency 48

  A crisis awaits: Conservation of water 49

  There is no Planet B: Air and water pollution 50

  Live and let live: Biodiversity 51

  See the forest for the trees: Deforestation 52

  Don't throw your future away: Waste management 54

  Studying the Effects of a Company's Operations on the Environment 55

  Direct operations 55

  Supply chains 56

  Defining "Green" for a Company 57

  Internalizing (or managing) externalities 58

  The 3Rs: Reduce, reuse, and recycle 58

  Detailing a Company's Performance as a Steward of the Physical Environment 60

  Managing operations to reduce emissions and promote sustainability 61

  Collaborating with others to create solutions for environmental issues 61

  Chapter 4: Give Me an 'S'! Investigating the Social Aspects of ESG 63

  Identifying Factors in a Company's Social Performance 65

  Customer satisfaction 65

  Data protection and privacy 66

  Gender and diversity 68

  Employee engagement 69

  Community relations 70

  Human rights 71

  Labor standards 72

  Evaluating a Company's Social Performance 73

  The results are in: Achievements 74

  When in Rome: Differentiating on a national or regional basis 75

  …