ESG (environmental, social, and governance) investing enables investors to align their portfolios with their personal preferences and beliefs about the future. Also known as sustainable funds, ESG funds have emerged to provide investors with the opportunity to fill their portfolios with products they believe in. Understanding the ESG product landscape can be challenging, so we've outlined 3 main categories of ESG products1 and how they might benefit you.

Types of ESG investing: What you need to know
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1This information is intended for educational purposes for investors. These are examples of general strategies and criteria that can be used for ESG investing. The advisors of Vanguard ESG funds may not apply these same strategies or criteria.
2Refers to the exclusion of certain companies that derive any revenue from involvement in controversial weapons, civilian firearms, nuclear power, or fossil fuels and the exclusion of certain companies that derive any revenue from the production of tobacco or conventional military weapons, or that derive greater than 5% revenue from supplying or retailing these products.
3The advisor may not be successful in assessing and identifying companies that have or will have a positive impact, or support a given position. In some circumstances, companies could ultimately have a negative impact, or no impact.
For more information about Vanguard funds or Vanguard ETFs, visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.
All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss.
Investments in bonds are subject to interest rate, credit, and inflation risk. Investments in stocks or bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk.
ESG funds are subject to ESG investment risk, which is the chance that the stocks or bonds screened by the index provider or advisor, as applicable, for ESG criteria generally will underperform the market as a whole or, in the aggregate, will trail returns of other funds screened for ESG criteria. The index provider or advisor's assessment of a company, based on the company's level of involvement in a particular industry or their own ESG criteria, may differ from that of other funds or an investor's assessment of such company. As a result, the companies deemed eligible by the index provider or advisor may not reflect the beliefs and values of any particular investor and may not exhibit positive or favorable ESG characteristics. The evaluation of companies for ESG screening or integration is dependent on the timely and accurate reporting of ESG data by the companies. Successful application of the screens will depend on the index provider or advisor's proper identification and analysis of ESG data. The advisor may not be successful in assessing and identifying companies that have or will have a positive impact or support a given position. In some circumstances, companies could ultimately have a negative or no impact or support of a given position.