The link between value creation and ESG is clear. A win win.
There is a “wall of money coming into ESG funds”
Bernstein
“Companies with the top ESG rankings now trade at a 30% premium to the poorest performers as measured by their forward price-to-earnings ratios”
The research is clearly showing that there is a green premium for companies who are attractive to ESG investment funds. The inflows into ESG specific funds from younger generations among others signal how individual investors want to make a return but also make a positive impact. The ESG funds reflect this in picking companies and equities to back which reflect this way of operating.
“The momentum driving corporate action on sustainability has reached a point where emerging public companies risk limiting their value potential if they do not embrace environmental, social and governance (ESG) management and disclosure.”
Companies who put ESG ahead demonstrate not only that they are responsible organisations but also that they are adapting to a changing environment which in the next 5-10 years will start to penalise those companies who have ignored the writing on the wall.
