AI Can Help Investors Navigate ESG

For experienced and novice investors, there are myriad complexities associated with environmental, social, and governance (ESG) ratings and scoring.

Resulting confusion speaks to the advantages of exchange traded funds that employ easy-to-understand approaches to ESG, including the Invesco ESG Nasdaq 100 ETF (QQMG) and the Invesco ESG NASDAQ Next Gen 100 ETF (QQJG).

Further ESG demystification can be harnessed via generative artificial intelligence (AI) — the form of AI rooted in machine learning that allows human users to interact with a computer program and ask it straightforward questions such as “Is ABC Corp. a good ESG stock?”

Of course, generative AI isn’t a perfect technology. It’s still in its infancy, indicating that advisors and investors shouldn’t rely on it for securities selection. There’s no guarantee that the answers provided will be good ones. That highlights the advantages of ETFs such as QQMG and QQJG.

AI and ESG: More Marriage Than Collision

In terms of applications among investment products, AI and ESG are not competing interests. In fact, the former could potentially facilitate more adoption of the latter.

“The most important step for individual investors right now, is to take advantage of free sources of institutional-grade environmental, social, and governance data, personalize your investing criteria based on your own values and performance requirements, and then follow the data to where values-based investments and extraordinary returns intersect,” reported Deborah Yang for Fast Company.