Environmental and Energy, Social Issues and Governance FactorsESG and Sustainability Players Shaping Perceptions and Decision Making INSIGHTS-edge is the Institute’s technology platform for delivering actionable information for leaders. We provide global news and updates, marketplace intelligence and other information resources designed to help investors and their service providers, and corporate leaders and boards identify, monitor, research and learn more about emerging trends and the key players who are shaping important and rapidly-emerging concepts of evaluating -- and valuing -- equity and other investments. There are important new ways at looking at public corporations – through the prism of Sustainability. Key factors for investors include “ESG” factors – environmental and energy, social issues, corporate governance – to try to determine the long-term sustainability of the enterprises they will invest in. Financial strength and outstanding performance of companies in investment portfolios are (of course) always of importance to institutional investors. But certain intangible and non-financial indicators are accounting today for one-third or more of institutional investment decisions. And these indicators in the end are of course, important elements of the financial health of an investment – they are tangible and financial. Leading-edge thinkers who increasingly guide investment strategies and decision-making today are looking well beyond “the numbers” of even the strongest performing corporate performers for clear indicators of a company’s sustainability over the long-term. The rising importance of key “ESG” and “Sustainability” factors for analysts, investors, asset managers and others guiding decision-making are shaping tomorrow’s winners, laggards and losers in the competition for capital. The consensus thinking among leading professional money managers, financial analysts, and (especially in Europe and the UK where this approach was developed and is in prevalent use) among institutional investor managers is that the “ESG Framework” is the most favored approach. The alignment of favorable corporate performance in key activities and performance – environment and energy, social policies and corporate governance – can signal long-term sustainability. This ESG framework is rapidly growing in importance in the world’s capital markets, including in the United States. There are varied approaches to applying this framework, among institutional investors and their managers, and the fast-growing number of third-party vendors and advisors who are shaping the field. Clearly, no one size fits all. And, there is still a general lack of awareness of the importance and relevance of ESG and Sustainability factors in corporate valuation among US corporate leaders and boards. There is a growing awareness of the approach among US institutional and individual investors, especially among socially responsible investors (SRI), who now represent $1 of every $8 invested in equities. GAI’S INSIGHTS-edge resources are available to clients. Contact Stan Adams, Vice President-Marketing, at Governance & Accountability for information. Stan Adams – 516-248-2383 ext 24 |
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