| Using such a lens can potentially uncover risk in a portfolio that may not have been apparent at first glance. Additionally, ESG analysis looks at multiple factors such as gender equality, diversity, legal and regulatory risks, climate change, and how corporations serve their shareholders, their employees, and their communities. If you want to learn more about this topic, we encourage you to visit Wells Fargo Advisors’ "Vision Investing" brochure here. |
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An investment’s social policy could cause it to forego opportunities to gain exposure to certain industries, companies, sectors or regions of the economy which could cause it to underperform similar investments that do not operate under a social policy. Risks associated with investing in ESG-related strategies can also include a lack of consistency in approach and a lack of transparency in manager methodologies. A socially responsible investing style may shift in and out of favor. All investing involves risk, including the possible loss of principal.