Environmental, social, and governance (ESG) investing is when an investor uses a socially conscious set of standards for a company’s operations to screen potential investments. Environmental criteria consider how a company performs as a steward of nature. Social criteria examine how it manages relationships with employees, suppliers, customers and communities. Governance deals with a company’s leadership, board composition, alignment with stakeholders and stakeholder rights. The benefits of ESG investing cannot be overstated. It has changed the focus of investors and executives dramatically to think of things other than just returns and profits. It has led to much more diversity on corporate boards and allowed many retail investors the opportunity to make investments consistent with their values. However, due to its passive nature it has several shortcomings.