Advancing environmental, social, and governance investing has been saved
Deloitte Insights
Advancing environmental, social, and governance investing
A holistic approach for investment management firms
With the growing focus on social responsibility globally, many investment management companies are including environmental, social, and governance aspects in their decision-making, aided by emerging technologies such as AI and advanced analytics. Not only might this help build credibility with investors, it could also create opportunities for alpha.
The sustainability movement is growing
Social consciousness has spread throughout many facets of life, and many companies are making a concerted effort to align with these principles. This effort has likely contributed to the steady rise in the media coverage afforded to “sustainable” brands over the past two years.1 Evidence suggests a similar growth in a desire for what are characterized as “sustainable” or “socially responsible” investments. Globally, the percentage of both retail and institutional investors that apply environmental, social, and governance (ESG) principles to at least a quarter of their portfolios jumped from 48 percent in 2017 to 75 percent in 2019.2 While directing investments based on one’s values has been around for decades, discussions between advisors and their clients about ESG investing have become commonplace.
1 Quid, “Which brands are successfully positioning themselves as ecofriendly?,” May 23, 2019. View in article
2 BNP Paribas, “The ESG Global Survey 2019,” 2019. View in article
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