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Why It’s So Hard to Be an ESG Investor

Supporting societal change through investing is one of the most popular themes in the financial world these days. But it is more challenging than many might realize.

Trillions of investor dollars are flowing to businesses that, according to themselves and other sources, are following the best so-called environmental, social and corporate-governance practices. This creates a powerful incentive for firms and asset managers that own the stocks of such companies also to make claims about the ESG-worthiness of those shares. Indeed, it would be hard to find a company that doesn’t make such claims.

The result is that it can be hard for investors to make sense of it all. “There is just so much confusion in the marketplace right now” about ESG, says Vishal Hindocha, the London-based head of sustainability at MFS Investment Management.

Read more from the Wall Street Journal.

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