Global Markets Recap
Buzzwords come in and out of vogue, but one term you can’t miss these days is “ESG” investing. Which stands for “Environment, Social and Corporate Governance.” In plain English, doing right by the earth is what this means. The numbers and data are hard to ignore:
• ESG investing grew to more than $30 trillion in 2019, and some estimates say it could reach well over $50 trillion over the next two decades.
• The leading motivation, based on the number of money managers citing ESG and the assets they represent, is client demand.
• These strategies, which include impact investing, are not new, but momentum is growing as shareholders demand action, and as the consequences grow for companies that fail to adapt.
There’s an old expression that the customer is always right. When it comes to ESG investments, it’s hard to pretend in this era the philosophy of many investors and consumers has changed from “Greed is Good” to “Green is Good”. Putting an action plan for any business to enshrine the principles of ESG investing, consumption, asset allocation, etc. makes sense in a world where competitors can move fast to seize an advantage. As a new decade commences, small businesses should begin to look at ways to capitalize on client-driven demand is appropriate. Funding an ESG strategy could reap corporate significant dividends tomorrow.
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