Investments in sustainability issues are shareholder-value enhancing.
The trend/insight:
According to a recent Forbes article, firms with good performance on material sustainability issues significantly outperform firms with poor performance on these issues. If companies do not prioritize ESG, Kurt Harrison, co-head of Russell Reynolds Associates’ sustainability practice, warned that asset managers may divest their shares, thereby lowering stock prices and pressuring CEOs.
The opportunity:
Millennials and Gen Z, who will comprise 75% of the workforce in the next four years. Companies have the opportunity to hire talent based on their ESG practices. ESG and talent may seem unrelated, but they are deeply correlated. A study from Marsh & McLennan found that “employers with an attractive image among young talent have better ESG performance (25% higher) than average employers.”
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