Environmental, social, and governance (ESG) and sustainable investing have their share critics in the investing and political realms. Despite the negative chatter, these styles continue resonating with many advisors, investors, and — importantly — high-ranking executives.
Diligent Institute and Spencer Stuart recently surveyed nearly 1,000 board members of mainly U.S.-based and European companies. Results indicated that ESG and sustainability are still front-of-mind at many public and private companies. That could be good news for exchange traded funds such as the Calvert US Large-Cap Core Responsible Index ETF (CVLC).
CVLC, follows the Calvert US Large-Cap Core Responsible Index. It could be an attractive avenue for investors looking to tap ESG/sustainable investing principles. This is due to the fund’s straightforward approach. That trait is notable while there’s lingering debate on boards and in the C-suite regarding exactly how to prioritize ESG.
The Diligent Institute and Spencer Stuart study indicated that 45% of those polled need better ESG insights while another 44% are seeking clarity on how ESG affects their business or are concerned that ESG runs counter to the company’s broader objectives.
C-Suite Still Focusing on ESG
Some of the recent spotlight on ESG has been cast in negative terms. However, data confirm directors and executives still emphasize related plans. This signals that there could be longer-ranging investor appetite for products such as CVLC.
For example, 60% of respondents queried by Diligent Institute and Spencer Stuart said they’re taking extra steps to ensure ESG efforts are adequately reflected in company filings, including annual reports. Another 53% said they’re looking to bolster their firms’ ESG disclosures. Directors are also focusing on emerging ESG issues and risks.
“We asked respondents whether their companies view ESG issues mostly in terms of risk or opportunity on a 10-point scale, with 0 being mostly in terms of risk and 10 being mostly in terms of opportunity,” noted Diligent Institute and Spencer Stuart. “Across the board, 5 is the most frequently selected single answer, with 35% of directors saying their companies take a balanced view of ESG in terms of both risk and opportunity. Forty percent of respondents globally selected answers in the 6–10 range, indicating that they view ESG more in terms of opportunity.”
Still, there’s plenty of work to be done in terms of advancing ESG agendas at American companies. Just a quarter of those surveyed cited effective ESG leadership and ambition at U.S.-based firms.
For more news, information, and analysis, visit the Responsible Investing Channel.