Upheaval in society has people turning to socially responsible investing

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“SRI is all the rage and we’re seeing robust demand from our clients. But because it’s such a new trend, SRI remains very abstract and poorly defined. Everyone has different values, and it is difficult to measure exactly how an investment would satisfy them. One value that everyone tends to agree about is environmentalism. Renewable energy stocks have been performing well recently and more and more companies are pledging to lower the carbon emissions that result from their business.

A common framework for evaluating potential investments is ESG. (Environmental, Social, and corporate Governance). Several stock research firms provide numerical ratings for ESG. The methods for rating companies are abstract and inconsistent between analysts. They tend to focus on measuring PR risks related to ESG controversies, rather than the actual impacts of each company’s business.