Next year is expected to bring about double-digit increases to spending in environmental, social, and governance (ESG) initiatives by companies, as well as sustainability within companies and their supply chains, reported over half of senior executives surveyed. The survey was conducted by Verdantix and polled executives in charge of ESG practices within their companies, reports Environment + Energy Leader.
The pressure is being felt by corporations to focus on sustainability and ESG policies, with climate change policy development being reported as the main reason that there has been increasing corporate participation in sustainability measures over the last year. 26% of CEOs surveyed said that ESG was one of the top three focuses for their companies.
There is also an increasing focus on the role of supply chains in ESG practices; 25% of surveyed executives reported that their number one priority is to improve supply chain sustainability. ISN, global leader in contractor management services, recently released a white paper that found that 60% of the companies it had surveyed were implementing sustainability and ESG-related changes, but only 7% of them were tracking or measuring the impacts that those practices are having.
A lack of standards within ESG reporting is continuing to prove problematic, with roughly a third of executives reporting that lack of standardization was preventing their companies from being able to easily implement ESG practices. Approximately the same number of executives also said that the complexity of ESG metrics and data was proving to be a barrier.
ESG Investing With SPDR
One easy change that corporations are considering to improve sustainability is reducing emissions. For investors looking to invest in reduced emissions, the SPDR MSCI ACWI Low Carbon Target ETF (LOWC) offers investors exposure to companies with low carbon emissions and fossil fuel reserves.
The fund tracks the MSCI ACWI Low Carbon Index. This index reweights securities in the MSCI All-Country World Index (ACWI) to favor lower carbon emissions as well as lower fossil fuel reserves.
The benchmark overweights companies with low carbon emissions relative to sales and companies with low potential carbon emissions, offering lower carbon exposure when compared to the broad market.
LOWC’s top five sector allocations include information technology at 22.03%, financials at 15.73%, consumer discretionary at 12.16%, healthcare at 11.52%, and industrials at 10.29%.
The ETF carries an expense ratio of 0.20%.
For more news, information, and strategy, visit the ESG Channel.