There are so many definitions of ESG floating around, it is easy for many people to be sceptical if the popular acronym has any relevance at all. Maybe the simplest way to describe it is as a corporate performance evaluation criteria that assess a company’s governance mechanisms and ability to manage its environmental and social impacts. Such descriptions, however, fail to capture the enormity of that data collection and the means by which to evaluate criteria effectively.
Institutional investors, stock exchanges and boards increasingly use sustainability and social responsibility disclosure information to establish a link between a company’s ESG risk management and business performance. Let's take a step back and revisit the definition of ESG, an investment risk framework that measures the effect of the outside world on an asset. Given the context, any conclusions drawn must be met with some scepticism, as ESG in essence is not designed to indicate performance.
However, as regulators continue to inject the markets with reporting standards and taxonomies, the scope of the challenge is narrowing. And, although far from perfect, it does mean that institutions can work towards terminology that they know will be being applied across the board; providing some foundation can allow those truly committed to measuring sustainable impact a foothold into establishing its existence.
This webinar examines the challenges the asset management industry faces in applying “ESG” into their workflows and the means by which to get under the hood and establish more meaningful ways of measuring impact through data and regulatory change. If we don't address this confusion, the momentum behind investing in companies that are actively helping the planet and society is threatened.