Harvard Business Review: Invest in internal systems for ESG performance information
“99% of asset managers don´t care about sustainability reports”, I was told by an investor the other day. Once my blood pressure calmed down, I was pleased that Harvard Business Review confirmed my view, which is the opposite. That perception is outdated.
“Capital markets are in the midst of a sea change”, reports Eccles et al in the HBR. Issues including board quality and how that impacts financial value are discussed, concluding that ESG is almost universally on top of mind for executives at 43 global institutional investors.
The article addresses ethics, governance, strategy, risk, and communication, concluding also that investors are not only seeking information. They are looking to drive change. Companies need to increase middle managers’ involvement in material ESG issues.
So what is holding ESG investment back? The biggest obstacle is that most sustainability reporting by companies is aimed not at investors but at other stakeholders, such as NGOs, and is thus of little use to investors.
Eccles et als research reveals five actions that companies can take to prepare for the new era of sustainable investing.
One of them is: Invest in internal systems for ESG performance information.
We are very excited to be in this space right now, and look forward to engaging with more partners and users of CredAbility as we are now launching!
Read the full article in the Harvard Business Review here: https://hbr.org/2019/05/the-investor-revolution