Date of Publication: June 25, 2020

Author: CNBC

Summary:

ESG stands for environmental, social and governance. It is a catch-all term for socially responsible investing. It looks at how these aspects will impact a company’s financial performance. In 2019, the interest in sustainable investing increased to 85%. The Bank of America believes that the funds in ESG investing could rise to between $15-20 trillion over the next two decades because of changing demographics. BlackRock has began to reshape their approach to financial investments with respect to climate change as they believe that “climate-integrated portfolios can provide better risk-adjusted returns to investors”. The Volkswagen emission scandal in 2017 is an example of how companies have used ESG investing as a marketing ploy to increase profits. 87% of millenials are in favour of ESG investing.

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