WEBVTT

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Environmental, social, and
governance criteria, or ESG

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criteria, are an
increasingly popular set

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of standards to help investors
find companies with values

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that match their own.

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ESGs can also help
investors avoid companies

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that might have a
bigger financial risk

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due to certain environmental
or social practices.

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Because of its socially
conscious roots,

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ESG investing has been
called sustainable investing,

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responsible investing, impact
investing, or even socially

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responsible investing.

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Environmental criteria refers
to how a company performs

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as a steward of nature.

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It may include a company's
energy use, waste, pollution,

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and natural resource
conservation.

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Social criteria examines
how it manages relationships

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with employees, suppliers,
customers, and the community

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where it operates.

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And governance criteria deals
with the company's leadership,

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executive pay, audits,
internal controls,

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and shareholder rights.

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These days, many mutual
funds, brokerage firms,

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and robo-advisors offer products
that employ ESG criteria.

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And it's important to consider
that most companies won't often

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pass every test
in every category,

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so investors will need to decide
what's most important to them.

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