ESG/Green Investment and Allocation of Portfolio Assets

This article examines the current portfolio allocation in ESG and Green projects. Traditional investments focus on rates of return and risks associated with investment. Environmental, Social and Governance ( ESG) or Green factors are additional components that investors have to pay attention to. Environmental protection is very important. However, we see that the current different definitions of ESG or Green factors lead to distorted allocations in portfolio investments. In order to bring portfolio allocations to a desirable direction, global taxation on pollution or creation of an accurate Green credit rating based on emissions of various pollutants are recommended.