climate lingo: ESG
ESG stands for environmental, social, and governance. It’s a set of overarching criteria for evaluating a company’s operations, encompassing everything from climate change to labour practices. It’s a standard by which investors can measure a company’s commitment to sustainability and positive social impact. Increasingly, money is flowing to ESG assets. Writes Emily Chasan in Bloomberg:
UBS this week said it saw flows to ESG funds and pandemic bonds of more than $71 billion in the second quarter, bringing its ESG assets under management to $1 trillion for the first time. Citing Morningstar data, the firm found that 56% of sustainable funds outperformed their peers in the second quarter. Sustainable investors will likely keep the wind at their backs as governments push green stimulus, the Swiss bank's analysts said.