3 REASONS WHY ESG IS GOING MAINSTREAM
A headline in Forbes was titled “ The remarkable rise of ESG”
PEOPLE ARE NOW AWARE THAT THEY CAN MAKE A CHANGE
You have seen the impact of social campaigns and are concerned about ESG criteria seeing daily news and images such as childrens health being impacted by the water crises in Flint, Michigan or the continuing protest of Sioux and other Native American tribes against Keystone XL pipeline in their territory. You may have noticed that social movements on social media such as #MeToo, #Blacklivesmatter, and others have changed how corporations and towns conduct business. You want to do good and feel good.
PEOPLE ARE BUYING FROM COMPANIES THAT ARE ESG FRIENDLY
Increasingly, companies are touting their ESG credentials to enhance their brand appeal (Tesla, Walmart, BMW). Buying products from companies that adhere to your set of ESG ideals – for example, the exploding popularity of impossible burgers (Meatless) and the meteoric rise in the stock price of Beyond Meat in May 2019 in the stock market shows that consumers are aware of the heavy footprint of meat and want to eat vegetarian burgers once in a while or permanently.
GLOBAL CORPORATIONS EARN CREDIBILITY BY SIGNING UN’S PRI
The UN launched the Principles for Responsible Investment (PRI) at the New York Stock Exchange in 2006 and the Sustainable Stock Exchange Initiative (SSEI) in 2007. Corporation can earn increased credibility by signing the pledge but profiting at the same time through sustainability and ESG management.
ESG impacts Corporations and regions and therefore, your Investment. ESG includes how corporations, cities or regions respond to climate change, deal with their energy and water supply, manage their global supply chains, treat their workers and promote a corporate culture that builds trust and fosters innovation. ESG criteria is strongly correlated with financial profit: measuring corporate ESG criteria translates to a better investment.
In a recent Harvard Business Review, Robert Eccles notes the power of the consumer to take ESG mainstream. “When the CEO and the CFO are hearing about sustainability themes from the people who buy and sell their stock, then that makes it become very real. Has that happened yet in a broad scale? No. Is it happening now? Yes.”