The rap on what used to be called “values investing”—”the precursor to environmental, social, and governance investing (ESG)—was that it could be a drag on returns. But investors are increasingly focusing on another aspect of the framework: a method of avoiding risk that threatens stock prices.

ESG strategies have quadrupled in institutional portfolios over the past 10 years, says a survey from the NEPC consulting firm, to $4.7 trillion. True, 88% of pension plans have not incorporated it into their investing philosophy. But one-third of the plans indicated that, while they haven’t adopted ESG, they are interested in the concept.

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