Climate change tops list of most important ESG concerns | Money Marketing (2024)

Climate change is the most important environmental, social and governance (ESG) issues to investors.

In a survey by the Association of Investment (AIC), 56% of investors said that it matters to them.

Transparency and disclosure, pollution, and human rights are the next most important concerns.

Younger respondents ranked human rights higher than investors aged 45 and over, who considered transparency and disclosure more important.

The research also showed that just under two-thirds of private investors take ESG issues into consideration when investing.

The figure reaches 77% for investors under 45, and 61% for those 45 and over.

Climate change tops list of most important ESG concerns | Money Marketing (1)

The survey also asked respondents how important ESG issues were to them when investing.

Environmental issues are seen as slightly more important than governance ones, with differences depending on investors’ age, gender and wealth.

Social issues are more important to those with less money to invest.

In fact, those who have less than £100,000 in investable assets ranked social issues as 3.5 on a 1-to-5 scale of importance.

This compared with a ranking of 2.8 for those with more than £500,000 of assets.

Ninety One warns against ‘decarbonising by numbers’

Women also ranked social issues as more important compared with men.

Wealthier investors tend to prioritise governance over environmental and social considerations.

Those with more than £500,000 of investable assets ranked governance issues as 3.5 on the 1-to-5 scale.

This compared with rankings of 3.2 for environmental issues and 2.8 for social issues.

Climate change tops list of most important ESG concerns | Money Marketing (2)

AIC communications director Annabel Brodie-Smith said: “This research shows that the ‘E’ of ESG looms largest in the minds of the investing public, though social issues are important to younger investors and wealthier investors are most concerned about governance matters.

“The fact that climate change, pollution and the prevention of waste rank so highly among investors’ concerns is another sign of the dominance of environmental issues when it comes to ESG.

“With transparency and disclosure ranked as investors’ second biggest ESG concern, this is likely to lead to greater demand for clear, accessible information on asset managers’ environmental policies and the impact of underlying investments on the planet.”

AIC surveyed 454 private investors for this research.

Climate change tops list of most important ESG concerns | Money Marketing (2024)

FAQs

What are the biggest ESG issues? ›

The 5 biggest ESG challenges for businesses and manufacturers globally are: climate change, supply chain sustainability, social impact, data privacy and cybersecurity, and governance and ethics.

What are the most important ESG factors? ›

Adopting ESG principles means corporate strategy focuses on environment, social, and governance. This means taking measures to lower pollution, and CO2 output, and reduce waste. It also means having a diverse and inclusive workforce, at the entry level and the board of directors.

What are the ESG issues in 2024? ›

Climate change, corporate political influence, and artificial intelligence (AI) were among the top environmental, social & governance (ESG) issues showing up in shareholder proposals during the 2024 proxy season, according to the Proxy Preview report.

What are the climate risks for ESG? ›

In other words, climate risk has become a major environmental, social, and governance (ESG) risk priority for businesses—and investors. ESG is an important framework for evaluating risks and opportunities related to a company's operational impact on the environment, social issues, and governance.

What are the 23 ESG controversy topics? ›

ESG controversies score consists of 23 ESG controversy topics, including anti-competition, business ethics, intellectual property, tax fraud privacy, environmental issues, diversity & opportunity, etc. The default value of all controversy measures is 0, meaning companies with no controversies will get a score of 100%.

What are the big 4 of ESG? ›

The Bottom Line. The "Big 4" refers to the four largest accounting firms and includes Deloitte, PwC, KPMG, and EY. All four companies provide audit, assurance, consulting, financial advisory, risk management, and tax compliance services.

What are the three pillars of ESG? ›

The three pillars of ESG are:
  • Environmental – this has to do with an organisation's impact on the planet.
  • Social – this has to do with the impact an organisation has on people, including staff and customers and the community.
  • Governance – this has to do with how an organisation is governed. Is it governed transparently?

Which sectors are most impacted by ESG? ›

Some of the sectors impacted by the ESG theme are aerospace, defense & security, automotive, construction, consumer goods, financial services, foodservice, healthcare, insurance, mining, oil & gas, packaging, power, retail & apparel, sport, technology, media & telecoms, travel & tourism.

What is the most common ESG strategy? ›

Then, each time the portfolio is reviewed (this is called “rebalancing”), the company weight in the portfolio can be adjusted upwards or downwards according to its financial performance and its ESG profile. Today, the Full Integration strategy is the most popular ESG strategy in terms of assets invested.

What is replacing ESG? ›

'ESG' originated as a way to demonstrate compliance however it was often then used interchangeably, and use of the term was replaced with 'sustainability'. But it's making a resurgence – 'ESG' is back.

What's controversial about ESG? ›

One of the biggest criticisms of ESG is that it perpetuates what it was partly designed to stop – greenwashing.

What are the main ESG challenges? ›

FAQ's. 1. What are the key challenges in ESG reporting currently faced by companies? Companies are grappling with multiple ESG frameworks, evolving regulations, complex data management, quantifying and managing ESG risks, and using ESG performance to refine their sustainability plans.

What is the relationship between ESG and climate change? ›

According to empirical results, climate change significantly inhibits corporate ESG performance. It also found that continuously eliminating internal and external resource misallocation helps alleviate the adverse effects of climate change on ESG performance.

What are the financial risks of ESG? ›

Taking a holistic approach to ESG risks within risk management can deliver clear and tangible outcomes that move financial institutions toward a more effective, efficient and sustainable CRO function. Opportunities for growth within the Risk function. Opportunities for growth within the Risk function.

Why is ESG risky? ›

Environmental, social, and governance (ESG) risks are the potential negative impacts that a company's operations or supply chain can have on the environment, society, and its own governance practices. ESG risks can have a significant impact on a company's financial performance, reputation, and ability to operate.

What are the main ESG risks? ›

Types of ESG Risks
  • Climate Change: Greenhouse gas emissions, carbon footprint, deforestation.
  • Resource Depletion: Water scarcity, energy consumption, waste management.
  • Pollution: Air pollution, water pollution, soil contamination.
  • Biodiversity Loss: Habitat destruction, endangered species, invasive species.

What is the ESG controversy? ›

One of the biggest criticisms of ESG is that it perpetuates what it was partly designed to stop – greenwashing.

How many ESG issues are there? ›

We assess thousands of data points across 33 ESG Key Issues that focus on the intersection between a company's core business and the industry-specific issues that may create significant risks and opportunities for the company.

Top Articles
Core Inflation: What It Is and Why It's Important
Credible Reviews From 4,500+ Verified Customers
Skyward Sinton
Rubratings Tampa
Froedtert Billing Phone Number
Windcrest Little League Baseball
Wells Fargo Careers Log In
More Apt To Complain Crossword
Bbc 5Live Schedule
Clairememory Scam
Tcu Jaggaer
Aces Fmc Charting
Builders Best Do It Center
Dumb Money
Best Fare Finder Avanti
Marion County Wv Tax Maps
charleston cars & trucks - by owner - craigslist
How to find cash from balance sheet?
Panorama Charter Portal
Tcu Jaggaer
Mile Split Fl
Mikayla Campinos Laek: The Rising Star Of Social Media
Account Suspended
The Blind Showtimes Near Amc Merchants Crossing 16
Toyota Camry Hybrid Long Term Review: A Big Luxury Sedan With Hatchback Efficiency
Dallas Mavericks 110-120 Golden State Warriors: Thompson leads Warriors to Finals, summary score, stats, highlights | Game 5 Western Conference Finals
Del Amo Fashion Center Map
Play Tetris Mind Bender
Foolproof Module 6 Test Answers
The Eight of Cups Tarot Card Meaning - The Ultimate Guide
Miles City Montana Craigslist
Keshi with Mac Ayres and Starfall (Rescheduled from 11/1/2024) (POSTPONED) Tickets Thu, Nov 1, 2029 8:00 pm at Pechanga Arena - San Diego in San Diego, CA
Greyson Alexander Thorn
Till The End Of The Moon Ep 13 Eng Sub
Die wichtigsten E-Nummern
Noaa Marine Forecast Florida By Zone
15 Downer Way, Crosswicks, NJ 08515 - MLS NJBL2072416 - Coldwell Banker
Games R Us Dallas
Keeper Of The Lost Cities Series - Shannon Messenger
Thelemagick Library - The New Comment to Liber AL vel Legis
Lovein Funeral Obits
Uvalde Topic
craigslist: modesto jobs, apartments, for sale, services, community, and events
Nina Flowers
The Wait Odotus 2021 Watch Online Free
Professors Helpers Abbreviation
The Nikki Catsouras death - HERE the incredible photos | Horror Galore
What is a lifetime maximum benefit? | healthinsurance.org
Jigidi Free Jigsaw
Online College Scholarships | Strayer University
Slug Menace Rs3
Invitation Quinceanera Espanol
Latest Posts
Article information

Author: Edwin Metz

Last Updated:

Views: 5734

Rating: 4.8 / 5 (78 voted)

Reviews: 85% of readers found this page helpful

Author information

Name: Edwin Metz

Birthday: 1997-04-16

Address: 51593 Leanne Light, Kuphalmouth, DE 50012-5183

Phone: +639107620957

Job: Corporate Banking Technician

Hobby: Reading, scrapbook, role-playing games, Fishing, Fishing, Scuba diving, Beekeeping

Introduction: My name is Edwin Metz, I am a fair, energetic, helpful, brave, outstanding, nice, helpful person who loves writing and wants to share my knowledge and understanding with you.