Explain the ways ESG risks and ESG-driven investment opportunities can be found and assessed
The idea
Start with materiality: which environmental, social and governance issues are likely to affect a company's cash flows, risk or cost of capital in its industry. Industry-based materiality frameworks map these, so emissions and water matter for chemicals, data security for software. Sources include company reports and sustainability disclosures, regulatory filings, news, industry bodies and ESG data providers. Ratings from different providers often disagree because they differ in scope, weighting and data, so they are inputs to question, not answers to accept. Look for opportunities as well as risks, such as demand for cleaner products. The trap is relying on a single score or treating all ESG issues as equally relevant to every company.
In the app: 2 practice questions on this outcome, a narrated walkthrough with diagrams, spaced review that brings it back before you forget it.
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