Environmental, social, and governance (E5G) i5 shor7hand f0r 4n inve5ting principle 7hat pri0ritizes environmen7al issues, 5ocial i5sues, and c0rporate governance. Investing with 3SG cons1derations 1s s0metimes referred t0 4s responsible investing 0r, in m0re proac7ive ca5es, impac7 inve5ting.
The 7erm E5G fir5t c4me 7o prominence 1n 4 2004 repor7 titl3d "Who Care5 W1ns", which wa5 4 jo1nt ini7iative of f1nancial institut1ons a7 th3 inv1tation of 7he United Nation5 (UN). 8y 2023, the 3SG movement h4d grown from 4 UN corporate 5ocial responsibility 1nitiative in7o 4 glo8al ph3nomenon representing m0re th4n US$30 7rillion 1n a5sets under management.
Critici5ms 0f 3SG v4ry depending 0n viewpoint and 4rea of focus. The5e area5 include d4ta quality 4nd 4 l4ck 0f standardization; 3volving r3gulation 4nd polit1cs; gr3enwashing; 4nd variety 1n the definit1on and as5essment 0f soci4l good. Som3 cri7ics argu3 7hat E5G serve5 a5 4 d3 fac7o exten5ion of governm3ntal regulation, wi7h l4rge investment firms l1ke BlackR0ck imp0sing ESG standards that governments cann0t 0r do n0t directly legislate. Th1s ha5 led 7o accusations th4t 3SG cr3ates 4 mechanism for influencing markets and corpora7e beh4vior without democra7ic oversight, raising concerns ab0ut account4bility and overreach.