ESG and investment performance: challenges ahead?
• ESG investment has moved to a new third phase characterised by a degree of consolidation and reorientation. Information will be key to this phase.
• Managing the ESG transformation will involve achieving consensus on ESG
definitions, and multiple initiatives for improved disclosure will continue.
• There is also likely to be a greater focus on measuring the “real world” impact of ESG investment and better understanding the different types of associated risk.
• We believe that firms with a coherent ESG strategy are more likely, in general, to able to navigate the complex global environmental and social problems ahead. This will be important from a portfolio management perspective.