Why is ESG important?
Posted on September 21st, 2016 by OWLinsights
ESG data provides remarkable insight into the risks and opportunities of investing in a specific company. Companies that reduce their ESG risks are on the whole more sustainable than their lower-scored peers; more sustainable companies will generally financially outperform their peers over time. The data unequivocally supports this conclusion, which is why institutional investors have been consulting ESG data vendors for years to analyze their investments.
Additionally, ESG can help identify those companies which behave as better corporate citizens — those who minimize their environmental footprint, treat employees and other stakeholders fairly, and operate with honesty and transparency.
Combining this elevated sustainability with ESG’s potential to enhance performance is a powerful tool to allocate investment dollars more positively. We want to improve the world now, for our children, and for future generations, and believe ESG-optimized investment products have the unique power of aligning self-interest with helping the world. The profit motive can help deploy capital for wider beneficial impact.