What is ESG?

When buying stock we are buying a tiny bit of ownership of a company; when buying a bond we are making a loan to a company.  In either situation we would like to evaluate the greenness of the company.  Several financial firms such as MSCI (formerly Morgan Stanley Capital International) rate companies around the world according to many criteria.  One large category of criteria is Socially Responsible Investing (SRI).  A widely-used subcategory is ESG, a composite rating for Environmental, Social, and Governance performance. 

Many ESG scores entirely exclude major producers of alcohol, firearms, tobacco, gambling, pornography, genetically modified organisms, and nuclear power.  Acronyms abound, but the definition of any specific index can be found on the internet.  Notably, the ESG standard itself does not exclude owners, producers, or transporters of fossil fuels, but the so-called ESG mutual funds that I looked at all exclude such companies.