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Corporate Social Responsibility (CSR) and Sustainability

How important are Environmental, Social, and Governance Factors when investing?

Thomson Reuters just compiled a report covering buy-side perceptions of Environmental, Social, and Governance Factors when investing in companies.

KEY TAKEAWAYS
• Eighty-four percent of participants evaluate ESG criteria to some degree when making an investment decision.
• Twenty-four percent of the respondents focus on corporate governance as opposed to all ESG issues equally.
• Only 16% do not consider ESG principles at all in their investment criteria.

While a majority of the participants say it is a low or moderate consideration when investing, many investors are beginning to incorporate ESG principles into their investment process as a measurement for the overall quality of management, their credibility, transparency, and communication strategy. Increasingly, investors are considering sustainability reports, corporate governance ratings, carbon disclosure, geopolitical issues, labor standards and other social and environmental practices.

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Dan

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Hi,
Our experience in Asia is that corporations from the North investing in business down here are least interested in comparison to their binding interest on ESG factors when doing business at home. It's simply a battle to get some of the expatriate CEOs to invest in clean technologies or lifecycle investments. Justice is discussed separate from right to trade uniions or collective bargaining.
rgds,
Uchita de Zoysa (uchita@sltnet.lk)
My experience in Egypt is that investors are more concerned with availability of skilled workforce and long term competitive wage rates. They already appear to have made the decision to invest in North Africa where an acceptable level of Governance, Social Responsibility and Environmental awareness meets their needs.
However I believe that governments of countries in this region with already high relative workforce costs should move to formally embrace CSR, using incentives to bring along domestic companies. In other words recognize that their wage costs are high and use a formalized structure of CSR to attract new FDI, actively seeking strong CSR values
Interesting stats, good to see the focus on ESG criteria growing. Thanks for posting.
I would think that most people would consider environmental, social, and governance factors before they invested in any company. Reason being, I think it would be a valuable asset to know how the company is run and whether or not they are a responsible company you could trust your own money with.

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