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ESG investing remains fraught with challenges

The article from LiveMint discusses the challenges associated with ESG (Environmental, Social, and Governance) investing. Despite the growing interest in sustainable investments, ESG investing faces several hurdles including the lack of standardized metrics for measuring ESG performance, which leads to inconsistencies in how companies report their ESG efforts. This inconsistency makes it difficult for investors to make informed decisions. Additionally, there's a risk of 'greenwashing', where companies might exaggerate their ESG credentials to attract investment. The article also points out the complexity in integrating ESG factors into investment decisions due to the diverse nature of what constitutes 'good' ESG practices across different industries. Furthermore, the financial performance of ESG investments can be hard to predict, with some studies suggesting that ESG funds might underperform traditional funds in certain market conditions. The piece concludes by noting that while the intent behind ESG investing is noble, the practical implementation remains fraught with challenges that require more robust frameworks and clearer guidelines to truly benefit both investors and the planet.

Read the Full Mint Article at:
[ https://www.livemint.com/money/personal-finance/esg-investing-remains-fraught-with-challenges-11733304006436.html ]