How much actual ESG capital is invested in stocks?
The must-read quarterly update for ESG Communications Specialists
According to our research, investors who fully integrate ESG into their investment process are managing more than 10% of the shares in listed companies globally. This percentage is above 50% when we include investors that consider some aspects of a company’s ESG performance.
Sustainable and Responsible Investors (SRI), focus on long-term capital allocation and thus seek a deeper understanding of the companies and sectors in which they invest. ESG-related dialogue with these investors creates a virtuous circle in which investors influence companies positively, leading to more sustainable businesses, which in turn attracts a higher presence of these long-term investors.
SRI Investors assess a company’s ESG risks and opportunities in areas such as climate change, supply chain and the alignment of executive remuneration to business sustainability goals.
Leaders Arena tracks the investment activity of nearly 10,000 institutional investors worldwide in order to determine the core component of responsible equity investments. We monitor the effective ESG integration into their equity-investment decision process, proxy voting activity, active engagement with companies and their own public research and disclosures. This enables us to quantify what we call ‘the core responsible investment equity market’, which provides a more realistic view of this market and a vital tool during the planning stages of a company’s ESG communication plan with the markets.
Based on this methodology, the data from Leaders Arena supports Investor Relations & Sustainability professionals that want to monitor the presence of SRI Investors in their shareholder base, target new investor opportunities, organise roadshows, and conduct extensive country and sector SRI ownership benchmarking exercises.