A survey that focused on institutional investors in Canada has determined that environmental, social and governance (ESG) has gone mainstream, with increasingly numbers of companies carrying out double-materiality evaluations. The survey found that investors are not only considering ESG factors in their investment evaluations but also expanding to the broader positive/negative impacts of their investments.
This comes amid indications from the country’s Environment and Climate Change Ministry that the nation will have a transition taxonomy by Dec. 31, 2024.
This latest survey was conducted by Millani, which offers corporate sustainability advisory and responsible investing services. Investigators began their study by collecting responses from 37 asset managers and owners who represent roughly $3.8 trillion of assets under management.
Their focus was on finding out whether ESG was dead, with the majority of investors refuting these claims. In figures, 81% of investors claimed that ESG wasn’t dead, while 16% argued that it was evolving. In addition, 94% of investors also admitted that the term’s polarization in the United States hadn’t affected their investment strategies.
In their report, the Millani investigators explained that the investment industry had matured, developing better tools, definitions and regulations. They noted that the industry had also recorded huge progress toward sophistication in ESG practices. The report also calls attention to comments made in the survey, with one asset owner who uses various asset managers noting that ESG had gone mainstream. The owner added that the issue was that not many had defined what ESG was, which made it hard for some to focus on risks associated with this framework.
Another investor voiced their opinion on the recent debate around the term’s use, noting that it was normal for there to be pushback when it came to change. They argued that in the U.S., ESG was thought of in terms of exclusions, which wasn’t the case, because the focus was mainly on the integration of environmental, social and governance factors.
Many expect that new rules will help clear things up.
Already, the European Union has implemented the Corporate Sustainability Reporting Directive, which requires that financial advisers and participants in the financial market inform investors on how they consider sustainability risks This directive also expands the scope of reporting to include other ESG areas such as biodiversity and the mitigation of climate change.
The United Kingdom’s Sustainability Disclosure Requirements also mandates financial institutions and companies to disclose their impact on the society and environment, be it negative or positive.
Even with the pushback and polarization surrounding ESG in the U.S., many enterprises such as Coyuchi Inc. appear focused on incorporating ESG principles in every aspect of their operations.
NOTE TO INVESTORS: The latest news and updates relating to Coyuchi Inc. are available in the company’s newsroom at https://ibn.fm/COYU
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