What is an exclusion list in ESG?

Environmental, Social, and Governance (ESG) considerations are crucial factors in modern investment decisions. One of the key aspects of ESG is the identification of common exclusion criteria to guide investment portfolios.

Among these exclusion criteria, controversial weapons are often top of the list. These include weapons that are deemed harmful to humanity or are used in conflict zones, contributing to instability and suffering.

Tobacco is another common exclusion criterion due to its negative health impacts and the harm it causes to both smokers and non-smokers alike. The industry is also known for its aggressive marketing tactics and efforts to undermine public health policies.

Alcohol is frequently included in ESG exclusion lists due to its potential for addiction, the harm it can cause to individuals and families, and its role in societal issues such as crime and violence.

Gambling is also a controversial area that is often excluded from ESG-focused investments. The industry is known for its potential to exploit vulnerable individuals and contribute to financial instability and addiction.