ESG, short for Environmental, Social and Governance portfolios, are nothing new, but as investors are becoming more devoted to social responsibility and environmental stewardship, ESG 401(k) portfolios made their way into the mainstream as a more socially responsible way to invest in the future.
Investing in an ESG portfolio can build your wealth for retirement like a traditional investment does, but in a way that aligns with your own personal values. The companies that make up an ESG 401(k) portfolio have been screened to meet a certain set of non-financial indicators of their accountability such as pollution-reducing measures, diversity in hiring and transparency in leadership. As investors, these companies promote initiatives that benefit their communities and the world as a whole.
When you invest in an ESG 401(k) portfolio, your money is working to help make the world a better place. You take part in a bigger movement, helping to initiate positive changes in the causes you believe in.
