ESG Considerations

Free CFA Level II lesson in Corporate Issuers. 13 min read, ~1,897 words.

Negative screening = exclude by criteria (values-based). ESG integration = adjust valuations (value-based). Different things. Financial materiality depends on industry context (use SASB as reference); 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 or average...