While environmental, social, and governance criticism remains elevated (and loud) and interest rates are affecting the performance of the related equities and exchange traded funds, ESG-committed investors can find relief on multiple fronts.
One example is ongoing commitment to ESG goals and plans found among high-ranking executives, including chief financial officers (CFOs). That could be a sign that the case for ESG ETFs, including the Invesco ESG NASDAQ Next Gen 100 ETF (QQJG) and the Invesco ESG Nasdaq 100 ETF (QQMG).
Perhaps bolstering the long-term case for funds such as QQJG and QQMG is the point that the annual Global Finance Trends Survey, conducted by global consulting firm Protiviti, found that CFOs are acknowledging a “substantial increase in the focus and frequency of their reporting related to ESG issues.”
Financial Leaders Focusing on ESG
Recently, there’s been talk of outflows from sustainable equity funds and data backup that assertion, but that belies C-suite emphasis on environmental, social, and governance issues – a factor that could bode well for QQJG and QQMG.
“Year over year, ESG metrics and measurement have jumped up the priority list, with CFOs and VPs of Finance noting it as their top priority in 2023, compared with it ranking in the 11th position just last year. In fact, 57% of publicly held and 40% of privately held companies report that measuring and reporting ESG risks and issues has become part of their finance team’s role in the last year,” according to Protiviti.
Of note to investors considering ETFs such as QQJG and QQMG is that these metrics and measurement topped the list of CFO priorities in the Protiviti survey after ranking 14th last year. This year, environmental, social, and governance metrics and measurement are outpacing issues such as cybersecurity, tax planning, cloud computing expenditures, and other “typical” CFO considerations.
Another factor that could augur well for these ETFs is CFOs’ increasing awareness of and efforts to prepare for a new era of enhanced regulations, which could bring much needed clarity.
“While the term ‘ESG’ has become a hot button issue for some, stakeholder demands and regulatory reporting requirements aren’t going away, leading CFOs and finance leaders to adapt as the ESG reporting landscape continues to evolve quickly, with priorities differing vastly across industries and geographies,” said Christopher Wright, global leader of Protiviti’s Business Performance Improvement solution.
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