The next major challenges facing ESG investment

Unified ESG investment standards bode well for the industry’s credibility, but new disclosure requirements and record-high inflation are testing the market’s patience for sustainable solutions.

The next major challenges facing ESG investment

August 09, 2022

Investing through an ESG environmental, social and governance lens remains popular, as companies evolve their business models to mitigate social burdens and negative consequences amid their pursuit of profit.

Besides corporations, investors are backing the idea. The Global Sustainable Investment Alliance GSIA estimates that total assets under management AUM with a focus on sustainability, amount to roughly $40 trillion and account for more than a third of professionally managed assets. The body suggests that this will breach $50 trillion by 2025.

Varying definitions and minimal comparable data have allowed companies to boost ESG credentials, thus enabling fund managers to claim similar achievements for the portfolios that invest...

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