Journal Article

Considerations on ESG Investment Implementation

Abstract: Although interest in investing according to environmental, social, and corporate governance (ESG) standards is widespread, investment managers face a number of basic considerations with their portfolio choices. In this article, I give a high-level overview of these considerations within the context of the investor motivation: ESG values, ESG value, or both. These considerations include whether investors should exclude certain firms or use a positive tilt; how they could integrate ESG into an investment approach; the role of third-party ESG ratings; how they should measure and report their portfolios' ESG qualities; and what evidence shows about whether integrating ESG principles or engaging firm management on ESG issues affects portfolio financial performance.

Keywords: corporate social responsibility; ESG investing; ESG values; ESG value; investment portfolio; sustainably responsible investing;

JEL Classification: G11; G19;

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Bibliographic Information

Provider: Federal Reserve Bank of Atlanta

Part of Series: Policy Hub

Publication Date: 2022-06-21

Volume: 2022

Issue: 7

Order Number: 2022-07