Why ESG Matters to Investors
Environmental, Social and Governance (ESG) initiatives are essential to stakeholder confidence. Communities, boards, investors, media, and policymakers are increasingly scrutinizing the actions organizations take to address sustainability issues. Strong strategies are critical to long-term competitive success, sustainable growth, and overall corporate reputation.
This means measuring ESG performance is critical; limited partners are now looking for tangible evidence of how ESG initiatives are implemented and ingrained into company processes by management. A robust sustainability program with well-defined goals and performance results can open access to large pools of capital, build a stronger corporate brand and promote sustainable long-term growth.
Regulators have their eye on ESG strategies too. In early 2021, The Securities and Exchange Commission (SEC) announced the creation of a Climate and ESG Task Force to develop initiatives to proactively identify ESG-related misconduct. It will simultaneously analyze climate disclosure and compliance issues relating to the ESG strategies of investment advisers and funds. With a SEC rulemaking on the horizon, companies need to be prepared for the commission’s ESG guidelines.
The bottom line? A strong ESG-focused strategy is a competitive advantage that affects access to capital and leads to strong investment opportunities. A company’s ESG priorities shape its culture, and we at Impacto find time and again that businesses have valuable opportunities to make a positive, measurable impact on their stakeholders and the public.
Impacto is a leading strategy and communications firm that partners with organizations to create sustainability solutions and custom ESG frameworks that drive growth, build trust, and make a positive impact on the world.