Page 21 - DIY Investor Magazine - Issue 26

‘THE COVID-19 PANDEMIC AND ITS AFTERMATH WILL LEAVE A LASTING LEGACY FOR GLOBAL MARKETS AND COULD STRENGTHEN THE NEED TO ADOPT A FAIRER, MORE SUSTAINABLE INVESTMENT APPROACH’
Many companies once sceptical of ESG and wider responsible investment initiatives have already had to take notice of growing shareholder scrutiny and public interest in corporate reputations.
As some corporations have found to their cost, avoiding environmental, social and governance best practise can result in serious reputational damage.
Indeed peak-to-trough market capitalisation losses of over US$534bn were reported for large US companies as a result of major ESG related controversies over the past six years.7
Looking ahead Parry believes a revolution in ESG standards could ultimately bring some major benefits for companies, their shareholders and the wider world and remains hopeful recent events could lead to a sea change in practice.
“In the final analysis, the reality is that a better society is actually good for business. Living in a healthy environment rather than a dystopian wilderness is better for sustaining profits and life on the planet and can help stem the systemic risk of climate change,” he concludes.
CLICK TO VISIT:
1BBC. Coronavirus: EU leaders reach recovery deal after marathon summit. 21 July 2020.
2Observer. Largest UK pension fund goes green. 02 August 2020.
3FT. Majority of ESG funds outperform wider market over 10 years. 13 June 2020.
4Morningstar.Global sustainable fund flows. ESG funds show resilience during COVID-19 sell-off. May 2020. 5Institutional asset manager. Social bond and sovereign green bond issuance surges. 30 June 2020. 6Worth.com. How to Keep Impact Investing Impactful. 27 July 2020.
7FT. ESG controversies wipe $500bn off value of US companies. 14 December 2019.
Important information:
https://www.bnymellonim.com/outlook/global-disclosure/
21 DIY Investor Magazine | Dec 2020