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2engage / Corporate Governance  / Glass Lewis Weighs In On ESG Investing

Glass Lewis Weighs In On ESG Investing

Glass Lewis’s Director of ESG Research, Courteney Keatinge, shares her thoughts on ESG investing in this very thoughtful Q&A which discusses holistic vs. equity investments and what makes sense for ESG. The E&S (environmental & social) will be front and center this proxy season, with more and more investors taking a sharp look at how companies are addressing environmental and social concerns that may materially impact a company’s bottom line over the long-term. Materiality is the focus. Many investors are trying to ascertain from a disclosure perspective, what the material impacts are facing a company and how it impacts that company’s specific industry. As a result, many companies are undergoing materiality assessments to be able to report out on this type of information and responsibly disclose to investors accordingly.

The tide is turning. Or maybe, the tide has turned. Millennial’s want to invest in socially and environmentally responsible companies, and they very much want to know which companies are getting it right and which ones are getting it wrong. In fact, I was watching Bloomberg TV, and an investment commercial came on which pictured a millennial and what is important in making a wise investment, low and behold, one of the questions was “is the company socially responsible.” That line is no accident, its a sign that the new wave of investors care and are paying attention. Companies understand this and are diligently working to disclose and provide this information to investors. Investors, also are being patient with companies as they work to disclose this information, but have expressed that they are very much interested in seeing the industry-specific material impacts to companies and looks forward to reviewing that information when made available.

Courteney Keatinge touches on this in her Q&A stating the following:

At the same time, we’ve seen shareholder proposals receive higher and higher support on issues that are material to companies. I think investors are trying really hard to get to a place where they understand what a material issue for a company is, and then they are working with those companies to make sure that they are tracking and disclosing and providing information on these issues.

From the investor perspective, there’s a big focus on materiality, and driving companies towards making changes to material financial indicators. However, when you look at what companies are doing internally, some of it is in response to employee or customer demand, which are often broader considerations than some of the material issues on which investors are really trying find out more information.

Check out the full Forbes article found here: Holistic vs. Equity Investments – What Makes Sense for ESG?

 

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