A Content Guide to Environmental, Social and Governance Investing for Faculty and Students

Environmental, Social, and Governance (ESG) investing is increasingly popular (Giese, Lee, Melas, Nagy, & Nishikawa 2019), and is now percolating into sustainability textbooks and pedagogy. This is problematic because many faculty teaching sustainability do not have a background in finance, and thus find teaching ESG challenging. This paper develops pedagogical resources to teach the fundamentals of ESG investing, be that in a Foundations of Sustainable Management course or a Business Ethics course. We do this by developing four learning objectives: (1) Understand the ESG basics, including why ESG investing is important to investors and, for faculty, outlining where it might be appropriately placed in an ethics or introduction to sustainability class, (2) Define ESG Investing and discuss how ESG investing strategies differ from regular investment strategies, (3) Identify the primary methods to choose ESG investments, the related ESG rating systems, and the primary proprietary investment options based on these screening rules, and (4) Identify ESG options available to investors that meet their risk preferences.