Are your values and investment aligned? Can you make a difference by investing in socially responsible companies? Are such businesses easy to find, and can you make money with them? Today, we talk about the possibilities and also the limitations of ESG investing.
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- ESG stands for Environment, Social, and Governance, but what does it imply? What can you expect from businesses that follow such guidance?
- Mike shares examples of “good” ESG stocks. Banks, railroads, and some consumer staples companies tend to score high in the ESG score. Does that mean they are in line with your values?
- To understand such scores better, we dive into the StarMine ESG Score provided by Refinitiv and available at Dividend Stocks Rock. We explain why some companies – SBUX, AAPL, CNQ, etc. – could be great investments while being among the worst ESG performers.
- What other indexes or scores are available to investors?
- Do ESG stocks tend to outperform or underperform the market? What kind of results can you expect?
- In the end, the limits of ESG investments are very personal. Mike shares his thoughts on why the ESG score is a good “cross-reference” but is not at the center of his research. Still, investing in companies that you will feel comfortable with surely helps sleeping well at night!
To pursue thoughts on limitations in your research, here’s an episode on why ignoring companies with a yield below 1% is a big mistake.
About a decade ago, Mike did a mini-series on Socially Responsible Investing. It’s interesting to see that so many years later, the conclusion remains similar!
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This podcast episode has been provided by Dividend Stocks Rock.