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What is ESG Criteria?

ESG criteria refer to the environmental, social, and governance factors used to evaluate the sustainability and ethical impact of an investment. Environmental criteria consider how a company performs as a steward of nature. Social criteria examine how it manages relationships with employees, suppliers, customers, and communities. Governance criteria assess the company’s leadership, executive pay, audits, internal controls, and shareholder rights. Investors use ESG criteria to screen potential investments and manage risk. Integrating ESG criteria into investment decisions can lead to more sustainable and responsible portfolios.

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