The term ESG (environmental, social, and governance) investing was coined in 2005, but it has only recently become a priority in the business world. Sustainability no longer exclusively refers to climate impacts, but it also considers the effects companies have on their internal employees and the communities in which they work. In order to create a resilient company, business leaders must take into account environmental, social, and governance challenges.
Now, a focus on ESG challenges is not only encouraged, but it is required by many investors seeking a sustainable company. Due to ESG investing’s increasing popularity, many corporations have come forward with bold claims about their efforts towards more sustainable practices. However, many of these claims are made without substantiation or accountability. Words without action have negatively impacted the ESG landscape by allowing companies to “greenwash” or “goodwash” their reputation and actions. ESG investing is the key to building a strong, resilient future, but only if companies are held accountable for their claims. This paper introduces ESG investing, discussing how it began, where it stands today, and important considerations for the future.
Group Project under the direction of Dr. Larry Chavis