Decoding ESG Investing?

Green investing, sustainable investing, impact investing, value investing, investing for the good; I could go on as there are many terms being used these days. But what does this really mean?

What Wiki Says

If you Wiki Environmental, social, and corporate governance (ESG) it is defined is an approach to evaluating the extent to which a corporation works on behalf of social goals that go beyond the role of a corporation to maximize profits on behalf of the corporation’s shareholders.

That Clears it up

Well now that makes it perfectly clear! Ok maybe not so much. I find myself having this discussion often when speaking with people about Mangrove Investor and what we do. You know, providing valuable insight into green investing, sustainable investing, impact investing, value investing, investing for the good, etc.

The discussion usually ends up with; “Now exactly how do you quantify a company as doing good?”

There are several services that attempt to rate public companies on their ESG performance, check the Grove U article ESG – How Is it Calculated?, but I typically give the consultant answer, it depends.

It’s an individual thing

It really struck a chord with me when I was listening to a podcast a while back. It was discussing ESG Investing and in particular investing in Johnson & Johnson which has a strong social ranking with regards to its ESG ratings. It quickly became clear that the guest on the podcast had no interest in investing in Johnson & Johnson. No matter how high it ranked on the ESG charts or how well that investment may have done for them financially. At issue was Johnson & Johnson’s position with their talcum powder products. Or more importantly their lack of position in the past. The guest considered this past sin unforgivable and regardless how Johnson & Johnson may be measured today it would never end up in their portfolio.

The point is no matter how well anyone or any service can define or rate a company with regards to ESG or any other measurement, it is your individual values that will drive your decisions.

Here at Mangrove Investor all we can do as relayers of information is to be as honest and transparent as possible. We do the deep research into every company we consider and present the data in a clear and concise manner. And that means you have the information you need to make an educated decision on whether to invest or not invest based on your values.

This issue of meeting your personal values becomes even more complex with looking at ESG funds. It becomes extremely difficult to provide valid rankings on the value worthiness of ESG funds given the sheer number of companies involved. For more on this check out The Grove Article Your “Sustainable” Investments Might Not Be

It Depends

So again, what is ESG Investing? Well, it depends on what you as an individual deem is important to you. Here at Mangrove Investor our hope is that we can make a difference by doing the heavy lifting to help guide our readers through this new maze of investing.

For the Good

Michael Nichols

For more information on ESG Investing and what it means check out this Grove U Article What is ESG Investing?