In search of authenticity in ESG integration

Responsible investing requires consolidation towards globally agreed standards on corporate reporting and the utilization of meaningful metrics

May 15, 2018 | Bonnie Saynay, Dr. Henning Stein and Ulrika Hasselgren

The concept of integrating environmental, social and governance (ESG) factors into investment decisions has grown enormously in recent years. So, too, has the proliferation of assessment instruments purportedly intended to help this trend flourish to best effect.

We question whether we have reached the point at which too much is measured and not enough is understood, whether a one-size-fits-all approach is being forced on an industry whose strength lies in diversity and whether asset managers and the companies in which they invest are being penalized for failing to meet prescribed and sometimes confusing standards when they should instead be encouraged and rewarded to engage and change.

Ultimately, we call for a return to authenticity and a back-to-basics approach. In doing so, we advocate a process of ESG integration that is driven by fund managers and which prizes enhanced understanding and meaningful engagement. 

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