A New Approach by Investors and Growing Importance Recent market analyses show that attention to ESG criteria—namely companies’ policies, practices, and transparency regarding environmental, social, and governance issues—is one of the key factors in long-term investment decisions. This is especially true among the younger generation of investors, where the alignment of personal values with investment choices becomes more significant. According to a recent survey of asset managers, 65 percent of respondents reported that their clients actively demand sustainable investment options, although this share rises to 80 percent among larger institutional investors who prioritize long-term risk and return considerations. In many cases, sustainable investment decisions are jointly made by financial analysis teams and ESG experts: on average, managers report that two specialized teams are involved in this process.

Value Creation in Sustainable Investment and Corporate Reassessment The value of sustainable investment stems from the understanding that companies with strong ESG performance often face lower operational and credit risks and are better positioned for long-term growth. Recent reports indicate that among 30 tested performance indicators, transparency in ESG reporting has had the greatest impact on investor trust and company valuation. With rising demand for responsible investments, companies are beginning to improve their ESG practices. Forty-two percent of large companies surveyed last year reported that they had fundamentally revised at least some of their reporting and operational processes to comply with ESG standards.

The Future of Renewable Energy: Examining Global Trends Join leading energy experts Dr. Sara Ahmadi and Engineer Reza Ghasemi to discuss how innovations and supportive policies can pave the way for a transition to a clean energy future.

Evaluation and Monitoring of ESG Performance by Organizations Organizations assign teams to evaluate and monitor companies’ ESG performance, though the depth of these assessments varies greatly. Thirty-five percent of investment managers report that their teams review all aspects of a company’s ESG report before investing—for example, before adding a stock to a green portfolio or approving a sustainable bond (Figure 3). A similar share say that only specific key ESG performance metrics are reviewed before making decisions. Respondents working in sustainability-focused investment funds are much more likely than those in other financial sectors to say that all ESG aspects are carefully assessed.