Here we are now in a new year, and new decade (the third decade of the 21st Century) and much of the buzz is all about (1) climate change and the dramatic impacts on business, finance, government and we humans around the globe; and (2) many more investors are moving their money to more sustainable investments.
As the 2020 ESG (Environment, Social, and Governance) season begins, we appear to be entering the third era of ESG investment integration.
The first generation of ESG investors used data on topics such as product involvement (alcohol, tobacco, gambling) or business practices (anti-union, involvement in Burma) to screen out “bad” companies. These investors often relied on a single data provider and simple guidelines (e.g., <5% of revenue is OK, more than 5% of revenue is bad).
January 14, 2020 /3BL Media/ - There is increasing pressure on companies to disclose accurate data on impacts against material social and environmental issues - plus the future risks and opportunities that the company faces. ESG information on companies is being utilised as a guide to the movement of capital. ESG is becoming mainstream.
It is a favorite pursuit of journalists and commentators at each year-end and the start of the new calendar year to look back and look forward to identify “top stories” and significant trends of the year past. And to look ahead at “what might be” in the new year. We present a few of these musing for you in this first newsletter of the year 2020.
By: Nadia Humphreys, Business Manager for Sustainable Finance solutions
As climate change continues to make headlines, sustainable investing – once a niche investment strategy – is now setting the agenda.
Investment firms increasingly realize they need to include environmental, social and governance (ESG) data in their decision-making processes, to manage risks and identify opportunities in a changing world. However, the lack of reliable and consistent ESG data is a key challenge, and most firms face a steep learning curve to understand ESG issues and make sense of the new information they are facing.
No hiding place: companies need to demonstrate they pay their fair share
The launch of a new tax reporting standard that seeks to ensure multinationals are much clearer about how much – and where – they pay their taxes has received widespread international support.
The GRI Tax Standard is the first global standard for comprehensive tax disclosure at the country-by-country level. It supports public reporting of a company’s business activities and payments within tax jurisdictions, as well as their approach to tax strategy and governance.
The terms of reference are familiar now to many more institutional owners and their managers (as well as to a growing number of retail investors who are their clients and beneficiaries). This movement began as “socially responsible investing” (“SRI”) which evolved over time to “sustainable & responsible investing” and on to “sustainable & responsible & impact investing” in the 21st Century.
In recent months we’re increasingly hearing and using the simplified term “sustainable investing” and “ESG investing”.