ESG Investing

About ESG Investing

ESG investing, considering environmental, social, and governance factors, grew from a niche to over 35 trillion by 2022. The movement was driven by concern about climate change, diversity, and corporate behavior. ESG funds promised that doing good and doing well were aligned. Critics argued ESG was marketing nonsense that delivered mediocre returns. Studies showed mixed performance. In 2022, Tesla was removed from an S&P ESG index while ExxonMobil remained, undermining credibility. Republican politicians attacked ESG as woke capitalism. The SEC imposed stricter rules on ESG fund labeling. Despite backlash, ESG considerations have permanently changed how many investors think about corporate behavior and risk.