2020’s spotlight on social justice and esg

 

The events of 2020 have again turned the spotlight on social inequalities. The pandemic and excessive use of police force have stricken people of color disproportionately. The recession and stay-at-home orders have set back people of color and women, especially working moms. Coincidentally this year, dollars directed to ESG investments have set new records. “ESG” stands for environmental, social, and governance. It’s an approach to investment selection and managing risk using criteria such as human rights, sustainability, and other social, not traditional financial, considerations. There is no way to draw a line of causality between these two themes: health, economic, social upheaval on the one hand, and interest in ESG on the other. After all, ESG investing spiked and set a record in 2019. Intuitively, however, it’s not hard to see how the events of this year may have prompted many more of us to align our finances with our social conscience.