Learn how ESG, sustainable, ethical, and impact investing approaches work, how to evaluate fund claims, and how governance and stewardship affect outcomes.
Sustainable and ethical investing asks a broader question than traditional portfolio construction alone. Instead of focusing only on return, risk, fees, and diversification, the investor also considers how environmental, social, and governance issues affect companies and whether those issues should influence what belongs in the portfolio.
This chapter introduces the main frameworks used in ESG and ethical investing, explains how environmental, social, and governance factors are evaluated, and shows why labels alone are not enough. In U.S. markets, investors still need to read the prospectus, understand the methodology, and decide whether a fund’s actual strategy matches its marketing.
Learn how labor practices, human capital, product safety, privacy, and community impact can influence a company's risk profile and long-term resilience.