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Making investment decisions according to stocks' social risks

Investing based on ESG factors has taken off in recent years, driven by big pension funds and money managers trying new ways to evaluate potential investments.

ESG can be a warning flag for stockmarket darlings with aggressive consumer or product safety practices that may be skating too close to the edge, says MSCI's Ms Lee.

PFIZER stock was riding high in June 2015, up 128 per cent in five years, making it the second most valuable US drugmaker. Nine out of 10 Wall Street research analysts recommended that investors hold it in their portfolio, if not buy more.

That same month, however, a different type of...

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