How can investors evaluate environmental performance?

Investors can evaluate environmental performance effectively through metrics such as carbon footprint, water usage, and waste management. These metrics provide concrete data that highlight a company's impact on the environment. For instance, a company's carbon footprint quantifies its greenhouse gas emissions, offering insight into how its operations contribute to climate change. Similarly, water usage figures can reveal the intensity of resource consumption and potential risks related to water scarcity, while waste management practices show how efficiently a company handles its waste and its commitment to sustainability.

This method of evaluation allows investors to make informed decisions based not just on financial metrics but also on the broader implications of a company's environmental practices. By focusing on these specific environmental factors, investors can better understand the sustainability risks and opportunities associated with a company, aligning their investments with their values and the growing trend towards responsible investing.