What do investors want? ESG research. When do they need it? Yesterday
Research, research and more research is needed for investors to navigate the complex world of ESG and SDG investing.
We have just 12 years to get climate change under control, the UN announced in October, so we had better get investing.
But unfortunately it is becoming clearer that investing in UN sustainable development goals (SDG)-aligned countries, companies and products is far more complicated than first believed. It is also becoming clear that financial institutions with strong environmental, social and corporate governance (ESG) criteria-focused research will be coveted by investors as they seek to figure out how to apply the $22 trillion in assets committed to responsible investing in an effective way.
Just where do you invest if you are looking to keep your investments ESG compatible, for example?
ESG v GDP
My favourite piece of recent research is Renaissance Capital’s October strategy report that shows ESG scores versus GDP of countries over time. The five countries that achieved the highest ESG scores according to its research are Denmark, Sweden, New Zealand, Switzerland and Norway.
As the authors point out, it pays to invest in these countries if you are looking for a pure ESG play, but also if your ESG goal is to invest in mostly white, rich, Christian-heritage countries.