Is Investing Based on ESG a Scam?

And Will Proposed Amendments Help?

ESG Sets Standards for a Company’s Behavior. Deemerwha studio/Shutterstock

Investing in Environmental, Social, and Governance (ESG) companies is currently at the forefront of business news. Many brokerage firms are offering products with the ESG criteria. In addition, mutual funds and robo-advisors are also offering ESG products.

Some companies are claiming to use ESG practices. However, defining precisely the criteria rating is often ambiguous. What is ESG, how is it rated, and does it help stockholders?

ESG Sets Standards for a Company’s Behavior

Environmental, Social, and Governance criteria have been around since the 1960s, but recently they are being increasingly held up as a way to influence companies to follow certain standards.