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Investing in one's own future has always been a good financial move. But what if you want to ensure that the companies you have a financial interest in are also helping to improve the present and future of all of us--and of the planet? More than ever before, sustainable investors want to be confident that a company's Environmental (net zero emissions target), Social (response to the Covid-19 pandemic), and Governance (no repeats of Enron and WorldCom) policies and actions are positively impacting the global outlook--and to identify ways that their dollar can incentivize business leaders to do even better. The worldwide rise of an Environmental, Socially Responsible, and Governance (ESG) approach to investing shows you're not alone, and the [...]+ trillion--and growing--committed in this way says it's already become a transformative global movement. ESG provides a framework for evaluating companies that, unlike unrelated investment strategies, informs and guides sustainable investment.
Even if you're a novice investor, ESG For Dummies will allow you to hit this new investing landscape running, providing you with measurable ways to factor ESG into company performance, see how these are reflected in your investment return, and show how you can monitor companies to ensure your money is being put to ethical use. You'll also become familiar with the big names to follow in the ESG world, how they're already effecting positive change, and how you can help.
* Identify the drivers for each category of ESG
* Define and measure material ESG factors for investing success
* Understand principles for building a diversified sustainable portfolio
* Recognize material ESG factors effect on company performance
ESG investing introduces powerful tools to do real and lasting good: this book shows you how to use them to help make everyone's future, including your own, much more secure.
Investing in one's own future has always been a good financial move. But what if you want to ensure that the companies you have a financial interest in are also helping to improve the present and future of all of us--and of the planet? More than ever before, sustainable investors want to be confident that a company's Environmental (net zero emissions target), Social (response to the Covid-19 pandemic), and Governance (no repeats of Enron and WorldCom) policies and actions are positively impacting the global outlook--and to identify ways that their dollar can incentivize business leaders to do even better. The worldwide rise of an Environmental, Socially Responsible, and Governance (ESG) approach to investing shows you're not alone, and the [...]+ trillion--and growing--committed in this way says it's already become a transformative global movement. ESG provides a framework for evaluating companies that, unlike unrelated investment strategies, informs and guides sustainable investment.
Even if you're a novice investor, ESG For Dummies will allow you to hit this new investing landscape running, providing you with measurable ways to factor ESG into company performance, see how these are reflected in your investment return, and show how you can monitor companies to ensure your money is being put to ethical use. You'll also become familiar with the big names to follow in the ESG world, how they're already effecting positive change, and how you can help.
* Identify the drivers for each category of ESG
* Define and measure material ESG factors for investing success
* Understand principles for building a diversified sustainable portfolio
* Recognize material ESG factors effect on company performance
ESG investing introduces powerful tools to do real and lasting good: this book shows you how to use them to help make everyone's future, including your own, much more secure.
Brendan Bradley is co-author of FinTech For Dummies. He fosters and develops support for new investment areas, including AI-assisted research for automated modeling and transforming unstructured financial content in the ESG ecosystem.
Introduction 1
About This Book 1
Foolish Assumptions 2
Icons Used in This Book 3
Beyond the Book 3
Where to Go from Here 3
Part 1: Getting to Know ESG 5
Chapter 1: Entering the World of ESG Investing 7
Surveying the Current ESG Landscape 8
Exploring What ESG Is (and Isn't) 9
Defining the breadth of ESG 10
Comparing SRI, ethical, and impact investing to ESG 14
Determining whether ESG delivers good investment performance 16
Understanding ESG's Impact on the Environment, Society, and Governance 17
Meeting environmental and global warming targets 17
Providing solutions to social challenges 18
Meeting corporate governance requirements 18
Using International Standards to Determine ESG Objectives 19
Leading the charge: European legislation on ESG 20
Ahead of its time: The United Nations 21
Staying focused: The Sustainability Accounting Standards Board 21
Building a framework: The Global Reporting Initiative 22
Chapter 2: Back to the Future: Understanding the Evolution and Growth of ESG Investing 23
Studying the Evolution of Investing in ESG 24
Investing through the ages: From SRI to ESG 24
Go green: The changing global environment 27
On trend: Changing investor demographics 28
Crunch the numbers: Evolving data and analytics 29
Exploring the "Personality" of an ESG Company 31
Determining material ESG factors 31
Performing a materiality analysis 32
Applying weights to materiality measures 33
Understanding Why ESG Is Important 34
Global sustainability challenges 35
The interest of millennial investors in ESG 35
More systematic, quantitative, objective, and financially relevant approaches 36
Surveying Specific ESG Ratings and Metrics 36
Data quality, ratings bias, and standardization 37
Issues with ESG scoring 38
ESG momentum importance 39
Applying artificial intelligence and data science to ESG analysis 39
Defining an ESG Policy 40
Familiarize yourself with ESG and asset owner-specific legislation 40
Undertake a peer review 41
Review your statement of investment beliefs and core investment principles 41
Specify responsible investment guidelines 41
Outline responsible investment procedures 42
Include engagement and active ownership approaches 42
Spell out reporting requirements 43
Chapter 3: Give Me an 'E'! Defining the Environmental Sector in ESG 45
Outlining a Company's Use of Natural Resources 46
CO2 or GHG? Climate change and carbon emissions 46
Clean and green: Energy efficiency 48
A crisis awaits: Conservation of water 49
There is no Planet B: Air and water pollution 50
Live and let live: Biodiversity 51
See the forest for the trees: Deforestation 52
Don't throw your future away: Waste management 54
Studying the Effects of a Company's Operations on the Environment 55
Direct operations 55
Supply chains 56
Defining "Green" for a Company 57
Internalizing (or managing) externalities 58
The 3Rs: Reduce, reuse, and recycle 58
Detailing a Company's Performance as a Steward of the Physical Environment 60
Managing operations to reduce emissions and promote sustainability 61
Collaborating with others to create solutions for environmental issues 61
Chapter 4: Give Me an 'S'! Investigating the Social Aspects of ESG 63
Identifying Factors in a Company's Social Performance 65
Customer satisfaction 65
Data protection and privacy 66
Gender and diversity 68
Employee engagement 69
Community relations 70
Human rights 71
Labor standards 72
Evaluating a Company's Social Performance 73
The results are in: Achievements 74
When in Rome: Differentiating on a national or regional basis 75
Determining Measurements for Social Performance 75
The alignment of social and economic responsibilities 76
Long-term change for people and communities 77
Deciding on Weight Factors 78
Take your pick: Different social issues 78
Think outside the box: Scenario analysis 79
Chapter 5: Give Me a 'G'! Decoding the Governance Component of ESG 83
The Good Place: Defining What "Good" Corporate Governance Looks Like 84
The benefits of good governance 85
Practices and values 86
Multiple stakeholder orientation 87
Walk the Walk: Evaluating a Company's Governance Values 88
Board responsibilities 89
Board composition 90
Audit committee structure 90
Bribery and corruption 92
Executive compensation 94
Lobbying 95
Political contributions 96
Whistleblower schemes 97
Lead the Way: Emphasizing How 'G' Can Dictate the 'E' and 'S' Factors 98
Governance as an overarching principle for ESG 98
The role of governments 100
Around the World: Underlining Regional Differences in Governance Activities 101
Emerging markets 102
North America 104
Europe 105
Chapter 6: Highlighting Corporate Greenwashing 107
The Grass Isn't Always Greener: The Basics of Greenwashing 108
Tracking the growth of greenwashing 108
Specifying the details 109
Using plain language 110
Setting up a system 112
Just When You Thought It Was Safe: Coronawashing 113
Coronawashing on the corporate side 113
Coronawashing on the investor side 114
Part 2: Investing in ESG through Different Instruments 117
Chapter 7: Approaches to ESG Investing 119
Understanding Socially Responsible Investing 120
Looking at reasons for SRI 120
Comparing a best-in-class strategy to an exclusion strategy 121
Weighing the potential return on SRI decisions 122
Evaluating Impact Investing 124
Defining and tracking "impact" 124
Measuring social and environmental outcome targets 126
Calculating impact metrics 127
Focusing on Faith-Based Investing 128
Reviewing religious principles of finance 128
Examining exclusion screening and divesting 129
Advocating for values through proxy voting 130
Chapter 8: Analyzing Equity-Based Instruments 133
Integrating ESG Strategies into Investment Decisions 134
Just the basics: Getting an overview of the process 134
Using active strategies 136
Analyzing the impact of different ESG scores 137
Watch out: Thinking about risks and disclosures 138
Investigating how companies with higher ESG scores outperform 139
Take it easy: Applying passive strategies 140
Reviewing relative returns and performance of ESG stocks 143
Verifying Quantitative Strategies 145
Constructing equity portfolios that integrate ESG factors 146
Adjusting stock index constituent weights 148
Determining which ESG factors matter most in quantitative strategies 148
Identifying Smart Beta Strategies 151
Extending negative stock screening to smart beta strategies 153
Using ESG equity factors and scores to weight portfolio construction 153
Focusing on a Given Theme 154
Sector exposure 154
Thematic exposure 155
Chapter 9: ESG and Fixed Income Instruments 157
Analyzing Fixed Income (Bond) Factors 158
The importance of risk 158
Strategies for adding ESG to fixed income portfolios 159
Bond issuer goals 160
Defraying interest rate costs 161
All together now: ESG integration issues 162
Bond pricing 163
Mix it up: Credit and ESG ratings 164
Emphasizing Bond Issuer Differences 165
For king and country: Sovereign issuance 166
Corporate issuance 168
Room for more: Emerging markets 168
Highlighting Fixed Income Indexes 169
Identifying Specific ESG Exposures 171
For the earth: Green bonds 172
Think big: Social bonds 174
Keep it up: Sustainability and sustainability-linked bonds 175
Chapter 10: Exploring Derivative and Alternative Instruments 177
Achieving Passive Returns Using ESG Indexes 178
The basics of exchange-traded products 179
OTC derivatives 180
Building blocks: Structured products 181
Increasing Focus on ESG in Alternative Assets 182
Sustainable lending 182
ESG in hedge funds 184
Focusing on Illiquid Assets 186
Around the block: Real estate 186
Laying foundations: Infrastructure 187
Hush-hush: Private equity 188
Investing in "Traditional" ESG 189
Pull the plug: The basics of renewable energy investment 190
Light my fire: Solar power 191
There she blows: Wind power 192
Chapter 11: Highlighting Geographical Differences in ESG Investing 195
The Beginning: Europe 196
Highlighting the regulatory developments 198
Enjoying a first mover advantage on ESG investment 201
Continuing inflows for ESG funds 202
The Middle: North America 203
Highlighting political and regulatory roadblocks in the United States 204
Investigating Canada's approach 206
Driving up demand 207
The End: Developed versus Emerging Markets 208
Seeing that emerging markets are lagging but disclosure is increasing 209
Highlighting political and regulatory developments 211
Determining whether an ESG approach is better suited to developed economies 212
Part 3: Applying...
Erscheinungsjahr: | 2021 |
---|---|
Fachbereich: | Betriebswirtschaft |
Genre: | Wirtschaft |
Rubrik: | Recht & Wirtschaft |
Medium: | Taschenbuch |
Inhalt: | 368 S. |
ISBN-13: | 9781119771098 |
ISBN-10: | 1119771099 |
Sprache: | Englisch |
Einband: | Kartoniert / Broschiert |
Autor: | Bradley, Brendan |
Hersteller: | Wiley |
Maße: | 232 x 187 x 21 mm |
Von/Mit: | Brendan Bradley |
Erscheinungsdatum: | 06.04.2021 |
Gewicht: | 0,506 kg |
Brendan Bradley is co-author of FinTech For Dummies. He fosters and develops support for new investment areas, including AI-assisted research for automated modeling and transforming unstructured financial content in the ESG ecosystem.
Introduction 1
About This Book 1
Foolish Assumptions 2
Icons Used in This Book 3
Beyond the Book 3
Where to Go from Here 3
Part 1: Getting to Know ESG 5
Chapter 1: Entering the World of ESG Investing 7
Surveying the Current ESG Landscape 8
Exploring What ESG Is (and Isn't) 9
Defining the breadth of ESG 10
Comparing SRI, ethical, and impact investing to ESG 14
Determining whether ESG delivers good investment performance 16
Understanding ESG's Impact on the Environment, Society, and Governance 17
Meeting environmental and global warming targets 17
Providing solutions to social challenges 18
Meeting corporate governance requirements 18
Using International Standards to Determine ESG Objectives 19
Leading the charge: European legislation on ESG 20
Ahead of its time: The United Nations 21
Staying focused: The Sustainability Accounting Standards Board 21
Building a framework: The Global Reporting Initiative 22
Chapter 2: Back to the Future: Understanding the Evolution and Growth of ESG Investing 23
Studying the Evolution of Investing in ESG 24
Investing through the ages: From SRI to ESG 24
Go green: The changing global environment 27
On trend: Changing investor demographics 28
Crunch the numbers: Evolving data and analytics 29
Exploring the "Personality" of an ESG Company 31
Determining material ESG factors 31
Performing a materiality analysis 32
Applying weights to materiality measures 33
Understanding Why ESG Is Important 34
Global sustainability challenges 35
The interest of millennial investors in ESG 35
More systematic, quantitative, objective, and financially relevant approaches 36
Surveying Specific ESG Ratings and Metrics 36
Data quality, ratings bias, and standardization 37
Issues with ESG scoring 38
ESG momentum importance 39
Applying artificial intelligence and data science to ESG analysis 39
Defining an ESG Policy 40
Familiarize yourself with ESG and asset owner-specific legislation 40
Undertake a peer review 41
Review your statement of investment beliefs and core investment principles 41
Specify responsible investment guidelines 41
Outline responsible investment procedures 42
Include engagement and active ownership approaches 42
Spell out reporting requirements 43
Chapter 3: Give Me an 'E'! Defining the Environmental Sector in ESG 45
Outlining a Company's Use of Natural Resources 46
CO2 or GHG? Climate change and carbon emissions 46
Clean and green: Energy efficiency 48
A crisis awaits: Conservation of water 49
There is no Planet B: Air and water pollution 50
Live and let live: Biodiversity 51
See the forest for the trees: Deforestation 52
Don't throw your future away: Waste management 54
Studying the Effects of a Company's Operations on the Environment 55
Direct operations 55
Supply chains 56
Defining "Green" for a Company 57
Internalizing (or managing) externalities 58
The 3Rs: Reduce, reuse, and recycle 58
Detailing a Company's Performance as a Steward of the Physical Environment 60
Managing operations to reduce emissions and promote sustainability 61
Collaborating with others to create solutions for environmental issues 61
Chapter 4: Give Me an 'S'! Investigating the Social Aspects of ESG 63
Identifying Factors in a Company's Social Performance 65
Customer satisfaction 65
Data protection and privacy 66
Gender and diversity 68
Employee engagement 69
Community relations 70
Human rights 71
Labor standards 72
Evaluating a Company's Social Performance 73
The results are in: Achievements 74
When in Rome: Differentiating on a national or regional basis 75
Determining Measurements for Social Performance 75
The alignment of social and economic responsibilities 76
Long-term change for people and communities 77
Deciding on Weight Factors 78
Take your pick: Different social issues 78
Think outside the box: Scenario analysis 79
Chapter 5: Give Me a 'G'! Decoding the Governance Component of ESG 83
The Good Place: Defining What "Good" Corporate Governance Looks Like 84
The benefits of good governance 85
Practices and values 86
Multiple stakeholder orientation 87
Walk the Walk: Evaluating a Company's Governance Values 88
Board responsibilities 89
Board composition 90
Audit committee structure 90
Bribery and corruption 92
Executive compensation 94
Lobbying 95
Political contributions 96
Whistleblower schemes 97
Lead the Way: Emphasizing How 'G' Can Dictate the 'E' and 'S' Factors 98
Governance as an overarching principle for ESG 98
The role of governments 100
Around the World: Underlining Regional Differences in Governance Activities 101
Emerging markets 102
North America 104
Europe 105
Chapter 6: Highlighting Corporate Greenwashing 107
The Grass Isn't Always Greener: The Basics of Greenwashing 108
Tracking the growth of greenwashing 108
Specifying the details 109
Using plain language 110
Setting up a system 112
Just When You Thought It Was Safe: Coronawashing 113
Coronawashing on the corporate side 113
Coronawashing on the investor side 114
Part 2: Investing in ESG through Different Instruments 117
Chapter 7: Approaches to ESG Investing 119
Understanding Socially Responsible Investing 120
Looking at reasons for SRI 120
Comparing a best-in-class strategy to an exclusion strategy 121
Weighing the potential return on SRI decisions 122
Evaluating Impact Investing 124
Defining and tracking "impact" 124
Measuring social and environmental outcome targets 126
Calculating impact metrics 127
Focusing on Faith-Based Investing 128
Reviewing religious principles of finance 128
Examining exclusion screening and divesting 129
Advocating for values through proxy voting 130
Chapter 8: Analyzing Equity-Based Instruments 133
Integrating ESG Strategies into Investment Decisions 134
Just the basics: Getting an overview of the process 134
Using active strategies 136
Analyzing the impact of different ESG scores 137
Watch out: Thinking about risks and disclosures 138
Investigating how companies with higher ESG scores outperform 139
Take it easy: Applying passive strategies 140
Reviewing relative returns and performance of ESG stocks 143
Verifying Quantitative Strategies 145
Constructing equity portfolios that integrate ESG factors 146
Adjusting stock index constituent weights 148
Determining which ESG factors matter most in quantitative strategies 148
Identifying Smart Beta Strategies 151
Extending negative stock screening to smart beta strategies 153
Using ESG equity factors and scores to weight portfolio construction 153
Focusing on a Given Theme 154
Sector exposure 154
Thematic exposure 155
Chapter 9: ESG and Fixed Income Instruments 157
Analyzing Fixed Income (Bond) Factors 158
The importance of risk 158
Strategies for adding ESG to fixed income portfolios 159
Bond issuer goals 160
Defraying interest rate costs 161
All together now: ESG integration issues 162
Bond pricing 163
Mix it up: Credit and ESG ratings 164
Emphasizing Bond Issuer Differences 165
For king and country: Sovereign issuance 166
Corporate issuance 168
Room for more: Emerging markets 168
Highlighting Fixed Income Indexes 169
Identifying Specific ESG Exposures 171
For the earth: Green bonds 172
Think big: Social bonds 174
Keep it up: Sustainability and sustainability-linked bonds 175
Chapter 10: Exploring Derivative and Alternative Instruments 177
Achieving Passive Returns Using ESG Indexes 178
The basics of exchange-traded products 179
OTC derivatives 180
Building blocks: Structured products 181
Increasing Focus on ESG in Alternative Assets 182
Sustainable lending 182
ESG in hedge funds 184
Focusing on Illiquid Assets 186
Around the block: Real estate 186
Laying foundations: Infrastructure 187
Hush-hush: Private equity 188
Investing in "Traditional" ESG 189
Pull the plug: The basics of renewable energy investment 190
Light my fire: Solar power 191
There she blows: Wind power 192
Chapter 11: Highlighting Geographical Differences in ESG Investing 195
The Beginning: Europe 196
Highlighting the regulatory developments 198
Enjoying a first mover advantage on ESG investment 201
Continuing inflows for ESG funds 202
The Middle: North America 203
Highlighting political and regulatory roadblocks in the United States 204
Investigating Canada's approach 206
Driving up demand 207
The End: Developed versus Emerging Markets 208
Seeing that emerging markets are lagging but disclosure is increasing 209
Highlighting political and regulatory developments 211
Determining whether an ESG approach is better suited to developed economies 212
Part 3: Applying...
Erscheinungsjahr: | 2021 |
---|---|
Fachbereich: | Betriebswirtschaft |
Genre: | Wirtschaft |
Rubrik: | Recht & Wirtschaft |
Medium: | Taschenbuch |
Inhalt: | 368 S. |
ISBN-13: | 9781119771098 |
ISBN-10: | 1119771099 |
Sprache: | Englisch |
Einband: | Kartoniert / Broschiert |
Autor: | Bradley, Brendan |
Hersteller: | Wiley |
Maße: | 232 x 187 x 21 mm |
Von/Mit: | Brendan Bradley |
Erscheinungsdatum: | 06.04.2021 |
Gewicht: | 0,506 kg |