Investment strategy focusing on environmental, social, and governance factors to make decisions and achieve sustainable financial gains.

In the ever-evolving world of finance, ESG investing - a strategy that focuses on companies following positive environmental, social, and governance principles - is gaining traction. This trend, driven by rising social and environmental awareness, is expected to continue its expansion through 2030 [2][4][5].

Key points on the current state and future growth:

The global impact investing market, a significant part of ESG investing, is projected to reach approximately $254 billion by 2030, growing at a compound annual growth rate (CAGR) of around 20% from 2025 to 2030 [2]. ESG priorities in 2025 focus heavily on transition finance, climate adaptation, and natural capital investments [1]. Despite political and regulatory challenges, such as rollbacks in Europe and anti-ESG policies in some U.S. states, momentum persists worldwide, with innovations like Australia's sustainable finance taxonomy and ongoing developments in UK sustainability standards [3][5]. Global sustainable funds saw net inflows rebound to $4.9 billion in Q2 2025, after a first-quarter downturn, with European investors driving much of this recovery [4]. Remarkably, ESG funds have performed in line with or better than broader equity and bond markets, suggesting financial competitiveness alongside sustainability goals [4].

Brokerage firms and robo-advisors like Betterment and Wealthfront are supporting this growth by offering accessible ESG-focused portfolios and tools that enable investors to pursue sustainable and impact-driven strategies aligned with evolving priorities in climate and social governance [1][2][4][5]. Many brokerage platforms and robo-advisors now offer dedicated ESG investment portfolios or funds, allowing retail investors to incorporate ESG criteria with ease. Robo-advisors such as Betterment and Wealthfront typically include ESG options where investors can select portfolios focused on sustainable companies or ESG-screened ETFs to align investments with environmental and social values. These platforms provide automated portfolio management with ESG-focused asset allocation, rebalancing, and tax efficiency, which lowers the entry barrier for sustainable investing. Brokerage firms are increasingly integrating ESG data and metrics into their platforms to help investors evaluate ESG risks and opportunities [5].

Investors assess a company based on ESG criteria by evaluating a broad range of behaviors and policies. Governance criteria ensure a company uses accurate and transparent accounting methods, pursues integrity and diversity in selecting its leadership, and is accountable to shareholders. Social criteria involve evaluating a company's relationships with internal and external stakeholders, such as donations to the local community, employee volunteer programs, and workplace conditions. Environmental criteria include evaluating corporate climate policies, energy use, waste, pollution, natural resource conservation, and animal treatment [6].

Several other companies, like Morningstar and Bloomberg, have created criteria for scoring companies on ESG objectives. Trillium Asset Management uses a variety of ESG factors to help identify companies positioned for strong long-term performance. Trillium, for instance, does not invest in companies involved in major controversies related to human rights, animal welfare, environmental concerns, governance issues, or product safety. Moreover, Trillium's ESG criteria preclude investments in companies that earn 5% or more of their revenues directly from coal mining or hard rock mining, gambling, tobacco, private prisons, weapons, and firearms [7].

In summary, ESG investing is growing rapidly with strong market flows and institutional interest despite some backlash. Brokerage firms and robo-advisors like Betterment and Wealthfront support this by offering accessible ESG-focused portfolios and tools that enable investors to pursue sustainable and impact-driven strategies aligned with evolving priorities in climate and social governance [1][2][4][5].