The main goal of ESG Fund is to select those enterprises that have made outstanding achievements in environmental protection, social responsibility and corporate governance to invest, while avoiding those enterprises that may have a negative impact on society or the environment. This kind of investment can not only promote sustainable development, but also reduce investment risks and improve long-term investment returns.
Specifically, ESG Foundation evaluates enterprises according to the following aspects:
1. Environment: Does the enterprise care about environmental issues, such as energy efficiency, carbon emissions, water resources management, etc.
2. Society: whether the enterprise is related to social issues such as employee welfare, human rights and consumer rights;
3. Corporate governance: whether the decision-making process of the enterprise is transparent and whether there is corruption.
ESG funds usually use a combination of quantitative and qualitative analysis to evaluate the financial data, products and services, supply chain management and corporate culture of enterprises, give each enterprise a comprehensive ESG score, and then determine the composition of the portfolio according to these scores.
It should be noted that ESG funds are not suitable for all investors. Although ESG fund is considered as an investment method beneficial to society and environment, it is often slightly different from the traditional financial analysis method, so it may have high volatility and risk. Before investing in ESG funds, investors should fully evaluate their risk tolerance and investment objectives, and understand relevant investment information and announcements.
ESG funds in China mainly include: social responsibility mixture of prosperity and whole society, social responsibility mixture of Huitianfu, and sustainable development theme of Caitong.