The Pragmatist’s Guide to ESG

Environmental, Social, and Governance (ESG) has been a headline in financial circles for well over a decade.Footnote1 From private equity and publicly listed companies to bonds and loans, the interest in “ESG Investing” has expanded exponentially over the last 10 years, powered by empirical studies that, for the most part, suggest a correlation with improved financial performance.Footnote2 By some estimates, roughly a third of all assets under management now consider some aspects of ESG information in their investment strategy.Footnote3 However, in the first part of 2023, ESG has exploded from investor research onto the front pages of major media outlets such as the New York Times,Footnote4 the Wall Street Journal,Footnote5 and even USA Today.Footnote6 The sudden mass interest has been driven, in large part, from backlash to the idea of ESG investing.