ESG ETFs seek to include Environmental Social or Governance goals into their investment strategy.
These goals can vary greatly, but most ESG ETFs seek to address environmental concerns like lowering carbon emissions, investing in green energy or producing electric vehicles.
The S- Social, focuses on ideas that include religious or ethical considerations like gender equality, supply chain treatment or anti-slavery.
The G Governance, considers how well a company is run and managed and seeks to avoid companies that may be corrupt, poorly run or carry a high reputational risk.
ESG investing is one of the highest-growth areas of the global ETF industry and is rapidly transforming from a niche to a core investment in many professional and personal portfolios.
Figure 2.1 Environmental, Social and Governance criteria
Source: CFA Institute
Want to know more? Take a look at the ESG ETFs available to buy in your region.