Sustainability LIVE on ESG for investment opportunities

Businesses across all sectors are embedding environmental, social and governance (ESG) into corporate strategies, but, like many other sustainability topics, standardisation of ESG can be difficult. 

While many organisations are calling out for a global system of corporate ESG, some of the speakers at Sustainability LIVE believe this is easier said than done. The ‘Panel Discussion: ESG & Corporate Responsibility’ provides great insight into the current state of ESG within businesses and its application in investments. 

Asset managers are responsible for ESG change

Philip Vernardis, Vice President and Head of Asset Stewardship Reporting at State Street Global Advisors (SSGA), explains how investors—particularly those that work with indices—are able to drive ESG changes, by pushing companies to comply with its standards. Vernardis divulges how this works for companies that cannot be removed from its portfolio, as SSGA is unable to do so. 

“I would describe it like being in a marriage where divorce is not an option,” Vernardis explains.

“We created our own in-house methodology, which we call the ‘R Factor’, and it’s based on financial material information. We score companies based on their disclosures against SASB Material Reality Framework. It provides a roadmap to our invested companies on how to improve their ESG.” 

From Diligent Corporation—a Software-as-a-service (Saas) provider for ESG—Adrian Fleming also highlights the importance of asset managers in shifting the perceptions and commitments of companies.

Fleming says: “I’ve seen an evolution of the asset managers, in particular, really stepping up to the plate in the past few years, and that has really driven significant change.”

“There is incredible work in the background that we’ve not yet seen. Asset managers are working on tooling up, ‘how can they help their investee companies to deliver higher quality and better data across the board?’.”

ESG as a corporate strategy

Throughout the sessions, the panellists referred to some key areas in which businesses remain current and incorporating ESG monitoring and compliance are critical for a sustainable transformation. Many of them refer to the SASB standards as a framework, which encourages businesses to optimise their ESG data and ensure their supply chains are compliant with similar standards. 

Catch all of the Sustainability LIVE sessions on the YouTube channel where you can catch up on all keynotes on-demand.