ESG ratings in the investment process

Abstract

Recently, environmental, social and governance (ESG) concerns are becoming increasingly popular due to the observed needs that the global community faces. Governments, business and individual factors engage all the way more in assisting to a world’s transition to sustainability and sustainable development. This study aims to explain the theoretical background behind the meaning of ESG, focusing on its characteristics, make a brief description of the occurred incidents in order to reach to the point of involving ESG issues into daily activities, such as business activities, investing, policymaking etc. and continues with noting the progress of Europe, North America and Asia as for their ESG engagement and their results. Moreover, this study presents both the factors which drive the global community to commit to ESG principles and the limitations which need to be overcome so as to eliminate the existing negativity towards the utility and efficiency of ESG.