Environmental, social and governance criteria (ESG) are used to screen investments based on corporate policy and to encourage companies to act responsibly.
Many mutual funds, brokerage firms, and robo-advisers now offer ESG-compliant investment products.
ESG criteria can also help investors avoid investment losses when companies engaging in risky or unethical activities are held accountable.
The rapid growth of ESG investment funds in recent years has led to allegations that companies have been disingenuous or misleading in touting their ESG achievements.