ESG finance poses risks but offers plenty of sustainable opportunities

SourceEnergy Voice
SectorFinancial Markets

Everyone you talk to agrees environmental, social, and governance (ESG) is critical to finance. Where people differ, though, is how best to achieve the goals this timely initialism sets out to capture.

A third of the world’s assets under investment have made ESG commitments under the Net Zero Asset Managers Initiative.

ESG sustainable financing

ESG’s forerunner was corporate social responsibility (CSR).

“There was a lack of maturity in the market, and a lack of readiness. Everything accelerated in 2020, marked by the Blackrock announcement in January 2020,” Workiva’s director of growth solutions Natalia Kaleta-Schraa, said.

Blackrock’s CEO Larry Fink letter declared a “fundamental reshaping of finance”.

It highlighted concerns around climate change and disclosure – while also setting the scene for increased socially responsibility investment decisions.

Blackrock would be more likely to vote against boards where they fail to make “sustainability-related disclosures”, Fink said. “Disclosure should be a means to achieving a more sustainable and inclusive capitalism.”

ESG is not just about planting trees, Kaleta-Schraa said. “It’ more...