2023-08-04 19:46:50
The ESG concept in English integrates the dimensions “Environmental”, “Social” and “Governance” (Corporate Governance), grouping in these three dimensions the most relevant non-financial factors of a company. The indicators defined based on these dimensions serve to measure the degree of commitment of companies with the goals of sustainable development and are essential when making and evaluating investments that are more responsible for the planet.
It is a strategic and analytical approach widely used by analysts and institutional investors to assess sustainability performance. Many governments and supranational structures, such as the European Union, have integrated ESG indicators into their private sector legislation and regulation, making them mandatory.
The ESG concept emerged following the adoption in 2015 of the United Nations 2030 Agenda, which defined a framework of 17 Sustainable Development Goals for the 2030 horizon.
After the initial euphoria, the ESG concept lost popularity among investors and companies. US Treasury Secretary Janet Yellen also claimed that the European Union’s ESG regulation was too restrictive and discriminatory against US companies, sowing the seed for future trade disputes between the US and the EU. The Republican party in the United States is also not very supportive of ESG, creating the risk that the initiative will be abandoned or deeply revised if Republicans take the White House in the November 2024 presidential election.
On the other hand, the outlook for ESG is getting darker based on the results of the latest Bloomberg survey.
A majority of Bloomberg clients who participated in the survey expect ESG funds to underperform overall market benchmarks in the coming year, while a growing number say ESG is nothing more than a fad.
For example, nearly 90% of 116 Bloomberg clients who are not directly involved in ESG expect ESG sector investment funds to lag market benchmarks in the coming year, and 55% of 181 clients who are involved in ESG – and are more interested in the performance of ESG funds — they are also pessimistic.
The pessimism does not stop there. Nearly 70% of those not directly involved with ESG say the investment strategy is nothing more than a fad, while just 18% of those who are engaged expect ESG issues to become more critical in their businesses and markets, down from 25% in the previous search.
Yet only a small minority of all respondents say their companies are failing to package or invest in ESG products, in part because the vast majority of respondents agree that “we all have a role to play in protecting the world’s resources”. And most say that Europe represents the biggest opportunities in the sector.
The comments that accompanied the survey show the huge divide that exists between those who say ESG is here to stay and those who think it is “a politically oriented ideology that has no place in professional investor decision-making”.
The Bloomberg survey included responses from 349 customers in the two-month period ended June 29. About 60% of respondents work in the US, where the Republican-led backlash against ESG has been building since early last year.
House Republicans held a series of hearings in July during which they called for the Securities and Exchange Commission’s efforts to impose more transparent corporate disclosure requirements for ESG-related factors to be reversed. In addition to battling the SEC, GOP lawmakers are pushing for tighter oversight of consulting firms and also in favor of limiting — or even excluding — ESG-focused investments from US Retirement Income Security Act funds. Officials (ERISA).
By Economic Editor
Angolan portal
#Investors #big #believers #ESG #socially #responsible #investing #reveals #Bloomberg #survey