How to Avoid Greenwashing When Choosing ESG Investments

Apr 11, 2022 10:10 AM ET
Article

by Lori Keith, the Director of Research at Parnassus Investments and Portfolio Manager of the Parnassus Mid Cap Fund 

ESG strategies are rapidly gaining popularity as interest in supporting companies that manage their carbon footprints, invest in their employees, and promote diversity surges. As more and more funds claim the ESG label, how can investors effectively decide which investments are genuine?

Avoiding Investments that Masquerade as ESG Choices

If you’re seeking to align your financial investments with your values, your decisions about which funds to include in your portfolio take on an additional dimension of complexity. Naturally, you should look for funds that most closely align with your own principles. And, above all, you should take steps to avoid any ESG-labeled fund that does not diligently pursue its stated objectives.

A Practical Framework for Evaluating ESG Funds

This article includes some steps that you can take to perform effective ESG due diligence and avoid being misled by labels. Read more aobut the 5 important steps herehttps://greenmoney.com/how-to-avoid-greenwashing-when-choosing-esg-investments

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