Impact Investments Demand Transparency
Investors are trying to quantify the risks associated with climate change, carbon emissions, supply chain, equality, and human rights. The movement is long overdue, but it still has a long way to go.
Nearly nine out of 10 millennial investors want sustainable investments. A recent study found that Millennial investors are twice as likely to invest in companies targeting social or environmental goals, while 72 percent of Gen Z believes in responsible investing. In response, many organizations are embracing sustainability as part of brand management. Many companies now see environmental, social, and governance (ESG) reporting, as a tool to attract customers, investors and financing. It’s also a benchmarking tool that helps stakeholders find the best corporate performers.
In a recent survey, EY found that 82 percent of CEOs embrace ESG as a strategic opportunity. ESG strategy can help a company build customer loyalty, attract and retain loyal employees, attract capital and more.
“ESG is Brand Management 101,” said Gary Chandler, CEO of Crossbow Communications. “Who wants to invest in a company that has something to hide?”
In order to realize its full potential, ESG reporting and investing demands consistency and accountability to prevent fraud. The business world must promote trust, good governance and best practices by creating clear standards for ESG reporting.
What’s the difference between ESG and CSR?
ESG aspires to be a set of disclosure standards that companies complete to communicate sustainability initiatives. Stakeholders, like investors, use ESG reports to screen their investments. CSR is a philosophy where a company strives to improve the world around them.
As ESG has become a priority for investors and companies alike, ESG scoring aspires to grade organizations on their ESG efforts. Like a credit score or a bond rating, an ESG score denotes a company’s ability to meet its ESG commitments, its performance, and its risk exposure.
Read the full story about ESG reporting and sustainability