Many of the nation's largest fund managers are tracking environmental, social, governance (ESG) factors when determining their investment strategies.

Emily Bannister, director of research at Boston-based Federal Street Advisors, says asset management firms are taking ESG, also often referred to as socially responsible investing (SRI), into account when researching performance because of an increased investor demand for platforms with companies that rate well with certain social causes such as climate change and shareholder activism. Bannister also emphasized that ESG has evolved to the point where investors want to reward companies for rating well with ESG factors rather than negative screening. She also points out that returns on ESG platforms have also improved in recent years.

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