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Considerations on ESG Investment Implementation

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  • Laura Starks

Abstract

Although interest in investing according to environmental, social, and corporate governance (ESG) standards is widespread, investment managers face a number of basic considerations with their portfolio choices. In this article, I give a high-level overview of these considerations within the context of the investor motivation: ESG values, ESG value, or both. These considerations include whether investors should exclude certain firms or use a positive tilt; how they could integrate ESG into an investment approach; the role of third-party ESG ratings; how they should measure and report their portfolios' ESG qualities; and what evidence shows about whether integrating ESG principles or engaging firm management on ESG issues affects portfolio financial performance.

Suggested Citation

  • Laura Starks, 2022. "Considerations on ESG Investment Implementation," Policy Hub, Federal Reserve Bank of Atlanta, vol. 2022(7), June.
    • Handle: RePEc:fip:a00068:96684
    DOI: 10.29338/ph2022-07
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    References listed on IDEAS

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    More about this item

    Keywords

    corporate social responsibility; ESG investing; ESG values; ESG value; investment portfolio; sustainably responsible investing;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G19 - Financial Economics - - General Financial Markets - - - Other

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