Demand for ESG investments and ESG, in general, continue to grow rapidly as most millennials are interested in sustainability and believe that their decisions and investments (financial and otherwise) in ESG could impact policy. Strong ESG policies and procedures are becoming of utmost importance. I recently read an article published by S&P Global, Key Trends That Will Drive the ESG Agenda in 2022, by Richard Mattison and Bernard de Longevialle. This article resonated with me because the authors highlight key trends and demonstrated them via visual means as well. Further, the authors explore the effects of climate change on ESG- an emerging risk topic being discussed at large banks nowadays.
“Following the unprecedented market and policy momentum behind ESG in 2021, investors, corporate boards, and government leaders have raised expectations for progress on climate pledges in 2022. Alongside climate, biodiversity, and other environmental concerns, social issues — like diversity, equity, and inclusion and worker wellbeing — appear poised to remain in the spotlight, particularly as they are increasingly woven into broader ESG discussions.”
The authors discuss various interesting emerging trends:
- Pressure will grow on corporate boards and government leaders to enhance their ESG skills.
- New regulations and reporting standards will demand more credible corporate disclosures.
- Governments and companies will face the challenge of turning net zeros pledges into near-term action.
- Climate transition strategies will increasingly embrace social issues.
- Climate stress testing will gain prominence in the financial services industry.
- Assessing natural capital and biodiversity risks will continue to rise in importance.
- Social issues in supply chains will command more attention.
- The debate over divestment versus engagement will heat up.
- The integrity of the growing sustainable debt market will be tested.
You can read the original article here.
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