These Five Small-Cap Impact Stocks Are Punching Above Their Weight In Addressing Social and Economic Challenges
Nasdaq Over the last decade ESG (environmental, social and governance) stocks have quickly been gaining in popularity. In fact, astudy conducted by asset manager Capital Groupin 2022 found that 89% of investors now consider ESG factors in some way when choosing investments.
More recently, investors have begun to tweak their investment strategy by shifting from ESG to impact stocks. Last year, asurvey conducted by Fidelity Charitablefound that more than 60% of Millennials utilized impact investing approaches to pick stocks. It also found that 40% of all investors planned to make their first impact investment in the coming year. However, contrary to what many investors think, ESG and impact investing are not interchangeable terms.
ESG versus impact investing
One of the simplest ways to explain the differences between ESG and impact investing strategies is based on timing. ESG focuses on a company's history and provides concrete numbers showing how it has progressed on major environmental, social and governance issues in the past.
