How can I use ESG for investing?
Posted on September 21st, 2016 by OWLinsights
Most individual investors have limited options for using ESG in their investment decisions. High net worth individuals and institutions may pay for access to ESG data, hire a sustainability consultant to create a suitable portfolio, or even engage the services of an index provider to create a fund for their institution or like-minded investors.
Retail investors can choose from an increasing number of ESG-themed ETFs or other funds. Not every fund will suit every investor’s tastes; read the prospectus carefully to understand how the index is determined, how the methodology affects exposure and diversification, and what risks that entails. Few ESG-themed funds have achieved mainstream status, many struggling against the market’s perceptions of what can be seen as a niche product. But as ESG gains traction and is better understood, funds which include ESG considerations will become more mainstream.