How ESG Metrics Work And Why All Investors Should Care

"The Conscious Investor" is presented by Nuveen.

Martin Kremenstein, head of retirement and ETF solutions at Nuveen, explains how ESG metrics serve as an indicator of quality and can be used as a risk management tool.

According to research from MSCI, companies in the bottom ESG quintile have been twice as likely to suffer a catastrophic loss (over 95% cumulative loss) within three years.

MSCI downgraded Equifax to the lowest ESG rating on cybersecurity concerns a year before the data breach was announced.

Kremenstein says that Facebook was excluded from Nuveen's NuShares ESG Large-Cap Growth ETF from the time it launched in December 2016. He explains, "it scored relatively poorly, compared to other tech companies over data privacy concerns."

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