ESG: How Companies Adapt to the Changing Investment Landscape

In October, Nasdaq Corporate Solutions hosted a panel discussion in London on the increasing importance of non-financial environmental, social and governance data and ESG ratings in buyer investment decisions.

Speakers from T. Rowe Price, DWS Investment, Sustainalytics and Standard Chartered spoke in the panel discussion entitled “ESG and the changing investment landscape – how companies need to adapt”.

ESG considerations are becoming more and more relevant globally and companies are now evaluated according to “non-financial” indicators in addition to more general financial indicators. Changing priorities such as climate change and gender equality have become critical issues for the global community. With the increasing importance of ESG metrics, asset managers are increasingly analyzing ESG data in conjunction with traditional financial metrics.

Discussion participants addressed a number of important issues such as the increasing integration of ESG data into investment decisions and the impact of ESG data and ratings on buyer investment decisions.

It has been noted that investors are becoming increasingly sophisticated in the analysis of ESG data.

Discussion participants discussed the challenges related to ESG data from a corporate and investor perspective. Financial data are highly standardised and regulated, while ESG data are non-standardised and only marginally regulated. The role of the providers of ESG ratings for the buyer side is to uncover and merge data that are not reported uniformly.

Issuers should reflect on sustainability roadshows: “We find sustainability roadshows really useful to really address ESG issues in depth”.

Identify key ESG issues that are relevant to your business: “You need to select the issues that will actually affect your future revenue and profit streams. Think about which risks are more specific for you as a company.