ESG deal innovation continues in race for competitive advantage

Author: Jimmie Franklin | Published: 4 Mar 2020

Corporates’ interest in environmental, social and governance (ESG) initiatives has continued, with a heightened focus on innovation.

A mixture of regulatory and reputational pressure is thought to have shifted prioritisation of ESG in the financial sector, with companies finding increasingly creative ways to become more sustainable.

"ESG investing has grown tremendously in recent years, and more and more funds are becoming ESG-aligned," said Michael Wilkins, global head of sustainable finance analytics & research at S&P Global. Research by the Global Sustainable Investment Alliance found that at the beginning of 2018, $30.7 trillion of assets under management by institutional investors are ESG-aligned in some way or another: a 34% increase since 2016.

"It is no longer a question of simply screening portfolios, and we now see ESG integration being used in portfolio analysis," he continued. "This implies that there is now a link between ESG and financial performance....