Environmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments.
- Environmental criteria consider how a company performs as a steward of nature.
- Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates.
- Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.
- ESG criteria are an increasingly popular way for investors to evaluate companies in which they might want to invest.
- Many mutual funds, brokerage firms, and robo-advisors now offer products that employ ESG criteria.
- ESG criteria can help investors avoid companies that might pose a greater financial risk due to their environmental or other practices.
Investors (notably younger generations) have, in recent years, shown interest in putting their money where their values are. As a result, brokerage firms and mutual fund companies have started offering exchange traded funds (ETFs) and other financial products that follow ESG criteria.Investopedia reports.
A heatmap is a data visualization technique that shows magnitude of a phenomenon as colour in two dimensions. Now with the help of the Algo-Chain’s tools you can easily screen the monthly performance of the ESG ETF’s within the heatmap format.
At the moment, within the pre-defined formats you can access the following ESG heatmaps:
- Classic ESG Equity
- Classic ESG Fixed Income
- ESG-Themed Investing
- Impact Investing
As an example if you choose the Classic ESG Equity category, you will get a heatmap with the list of ESG-compliant ETFs and monthly performance for the past 12 months with the best performers showing as green and the worst performers showing as red.
Moreover, on the single ETF level you get insights on the monthly ETF flows as well as performance chart options which you can change in line with your preferences.