News & Views

Investors Increasingly Consider Environmental, Social and Governance Issues

Earlier this month, 64 stock exchanges received letters signed by investors and companies requesting global voluntary reporting guidance that includes environmental, social and governance (ESG) considerations. The request was led by Alllianz Global Investors and supported by the UN Global Compact and the Principles for Responsible Investment.

Currently only 25% of WFE stock exchanges provide guidance to companies on reporting ESG information. The letter aimed to reduce this information gap, and emphasised the role of a robust and holistic reporting system in creating a stable financial system that has the capacity to advance sustainable economic growth.

A recent survey by EY highlighted a growing ESG conscience in the investor community with 82.6% of institutional investors likely to see non-financial considerations, such as the environment and human rights, as relevant to their decision process. The survey also revealed that 80% of respondents consider mandatory board oversight of nonfinancial performance reporting “essential” or “important” (up from 36% in 2014).

Resource Investors 2 thumbnailIntegrated Analysis: How investors are addressing evironmental, social and governance factors in fundamental equity valuation – showcases leading research from brokers and investment managers to demonstrate how investors and analysts are integrating ESG factors into fundamental equity valuation.