Social issues are perhaps the most difficult to research and least understood by investors with an environmental, social and governance (ESG) focus. But the risks and opportunities they represent are growing, and investors need a way to step up to the challenge.
From modern slavery to female representation in the workforce, companies are plagued by a growing list of social concerns. These issues account for a higher proportion of corporate controversies than environmental and governance issues (Display). Yet ESG-focused investors, who have become increasingly systematic and sophisticated in incorporating environmental and governance factors into investment decisions, don’t have similarly robust processes for addressing social factors.
The reason? Data about social factors are relatively scarce, vague and hard to blend easily into a research and investment process. With social trends and new legislation in the spotlight, investors can’t afford to ignore the risks to companies and investment performance.
Investors, in our view, can rise to this challenge—and the opportunities it creates—by understanding how to apply and expand upon the available data within a research framework that captures three critical dimensions of global social change.
ESG, SDG, CER, GRI, FSC, LCA, WELL Practitioner Publications, Diversity, ESG, ESG Investment, legislation, social issues, socially responsible investing Read More