Corporate ESG Risk: Environment, Society & Governance
Sustainable investing has enabled investors to think more systematically about the risks of unexpected, costly issues arising from ESG risk factors that can hurt long-run returns. A modern vision about investment criteria has positioned on top of the mainstream, how corporations are impacting the environment, society and corporate governance are generating interest in investors with a focus on that unexpected risks can be catastrophic for long-term results.
The benefits of sustainable investing may accrue through positive corporate reputation, reduced operating costs, new market opportunities or ethical management practices. Moreover, consumer trends point toward greater returns for sustainable companies. The perception of a trade-off between good ESG practices and financial performance is being replaced by an understanding of how environmental, social and governance issues can contribute to higher potential returns and inflate risk. The intensity of recent interest has been driven by a fundamental shift in sustainable investing has evolved, where find and how can it be reaching out a high-quality ESG performance now is fundamental.
Sustainability Accounting Standards and SEC Filings
According to the Sustainability Accounting Standards Board (SASB) current point of view, the sustainability corporate disclosure world is a present significant development. Investors are demanding reliable, comparable, financially material, decision-useful, industry-specific ESG information. Even though public companies might appropriately provide this information either within or outside of regulatory filings, some corporations appear to have decided that use 10-K and 8-K SEC filling because SASB topics and metrics are targeted at financially material ESG information, many investors will expect to see such disclosures being made within the SEC reporting regime and with the seriousness, accuracy, and controls comparable to traditional financial information.
Sustainability Indices: Benchmarks of listed companies’ future viability
Recently Yahoo Finance launched in partnership with Morningstar the sustainability metrics tab where investors can evaluate corporations EGS performance, on more of 2,000 public corporations, it will be updated to 11.000 corporations, 28,000 ETFs and mutual funds.
The Need For Tools
Increased adoption of sustainable investing practices ultimately depends on being able to identify clear benefits for investors. As with any investment process, it is important to have meaningful data and the right tools.
Top Challenges
In a Morgan Stanley survey, among the top challenges cited by asset owners are the availability of quality sustainability data (23%) and lack of knowledge about sustainable investing (16%). When the top three-ranked challenges are aggregated, the availability of quality ESG data stands out, with 68% listing it as one of their biggest challenges. Three out of the top four challenges address some form of informational inadequacy—evidence, data, and knowledge.
A New Framework: The United Nations Sustainable Development Goals
The SDGs consist of 17 goals that range from climate change, economic inequality, industry innovation and infrastructure, sustainable consumption, peace and justice, SDGs are gaining traction as an organizing framework for many global investors.
Improving corporate ESG performance
The money flows are redirecting towards the new challenges that the global development objectives demand from a sustainable point of view. To improve the ESGs ratios corporation can alignment to the UN SDGs, a critical step on here will be to identify how the goals directly and indirectly relate to their business. Companies should take a strategic approach and align their corporate priorities with the relevant SDGs to better engage with customers, employees, and stakeholders to make a positive impact.
According to the United Nations, these objectives, to be realized, must be accompanied by an equally ambitious agreement on financing for development, facilitation of technology and capacity-building. New ways must be found to mobilize and allocate more effectively financial resources and other means of implementation, such as information and communication technologies. Only by advancing together in this way we can achieve a better future for humanity.
Adopting the SDGs framework provide revenue, generating business growth opportunities and fostering innovation in products and services. By identifying new business models, products or services that drive progress toward the goals, more resilient and prosperous communities will likely emerge, markets will expand and new ones emerge, and ESG performance will boost.
Our proposal
The Sucre.IO platform comes to solve the connectivity problem between sustainability creation, their financing and measuring, where fund managers, corporations and investors from around the world can to align with the SDG framework, being able to generate competitive financial returns, positive social impact, corporate stakeholder's engagement, and hedge EGS risk factors.
Now, fund managers, corporations and investors can align with the SDGs* framework with the possibility to generate competitive financial return, positive societal impact, and corporate stakeholders engagement.
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