ESG excellence doesn’t yet pay off for companies, but public policy can help change that

WITH the ESG label slapped on an endless array of financial products, and the tools for quantifying sustainability risks in financial markets limited at best, it’s no wonder ESG (environmental, social and corporate governance) investing has suffered heightened scrutiny recently. The real question is whether the industry confronts that scrutiny head-on – because the future of ESG investing depends on it.

It’s hard to deny that momentum behind sustainability is growing across every corner of financial markets, especially among the investment community. The structural shift towards a more sustainable society, however, is by many measures still in its infancy. Companies, consumers, and investors are still finding their feet in that transition, learning new ways to better quantify ESG risks, adapt and grow more resilient in confronting them.

ESG investing is here to stay, but the real work is just beginning. With this in mind, we reflect on the main findings of our research and some lessons for the next phase of ESG.