2 minute read
Session #5 BONUS
Explore The World Economic Forum’s connection wheel on ESG topics:
https://bit.ly/3AseZf2
Companies are expanding the metrics they use to define success well beyond profit and sales. In response to growing concerns among their employees, customers, investors and impacted communities, many firms are making themselves accountable for their Environmental, Social and Governance (ESG) practices.
Mainstream investors once considered such measures “non-financial,” but have come to understand both related risks and opportunities and are demanding more related data.
The amount of ESG information being made available by rating agencies, technology firms, and auditing and consulting firms has exploded as a result, and efforts are afoot to bring more coherence and consistency to it through standards and regulation.
Explore The World Economic Forum’s connection wheel on ESG topics:
BONUS ARTICLES
Yes, Investing in ESG Pays Off
https://hbr.org/2022/04/yes-investing-in-esg-pays-off Published April 13, 2022 by Paul Polman & Andrew Winston
KEY POINTS
• “Many leading companies internalize the externalities by putting a “shadow price” on carbon inside the business (some collect real money as a self-imposed tax). Raising the price on carbon or other inputs drives different capital and investment decisions.”
• “Even when the sustainable choice is more profitable by traditional measures, it doesn’t mean people opt for it. We all have biases in how we make decisions, including thinking in linear, non-systemic terms, or going with what’s easy or right at hand. Nobody is immune — not CEOs, CFOs, or bankers. Investors may say to themselves, “I know how to make money on investing in fossil fuels, so I’ll keep doing that.”
• “A study from McKinsey Global Institute and FCLT Global showed that companies operating with a true long-term mindset made critical decisions like investing more in R&D and, as a result, had 47% higher revenue growth and faster growing market caps. Better tools and thinking can lead to more and better action.”
https://www.reuters.com/markets/us/how-2021-became-year-esg-investing-2021-12-23/ Published December 23, 2021 by Ross Kerber and Simon Jesop
KEY POINTS
• “Investors concerned about climate change and social justice had a bumper year in 2021, successfully pushing companies and regulators to make changes amid record inflows to funds focused on environmental, social and corporate governance (ESG) issues.”
• “Extreme weather becoming more frequent and events highlighting social justice issues, such as the death of George Floyd in Minneapolis police custody, contributed to ESG rising to the top of the agenda of investors, companies and policy makers.”
• “Stocks of companies rated highly for their sustainability efforts also notched gains. The MSCI World ESG Leaders’ index has risen 22% so far this year, compared with the MSCI World Index’s gain of 15%.”
