In an Investor Advisory, the North American Securities Administrators Association ("NASAA") provided information on environmental, social and governance ("ESG") investing. NASAA stated that while it is difficult to compare ESG factors among different funds, there are certain considerations that will help investors better protect themselves.
NASAA recommended that ESG investors consider (i) the quality of research in sustainability reports, (ii) the concrete numbers and metrics on corporate websites, (iii) media reports on company policies and lobbying efforts and (iv) independent sources to help investors double check company claims.
Further, NASAA cautioned that an ESG investor should:
- check the track record of an ESG company and management;
- be wary of individuals promoting emerging or popular trends;
- seek independent, professional advice;
- understand his or her risk tolerance and financial situation; and
- contact the local securities regulator if a concern arises regarding an investment or an individual.
Primary Sources
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.