ESG Considerations

Free CFA Level II lesson in Corporate Issuers. 12 min read, ~1,742 words.

Negative screening = exclude by criteria (values-based). ESG integration = adjust valuations (value-based). Different things. Financial materiality depends on industry context, carbon emissions matter for utilities, not software companies. ESG ratings from different providers correlate at only 0.4-0.6, do not treat them as interchangeable. Impact investing requires measurable, targeted non-financial...

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