Edelman's annual "Trust Barometer Special Report: Institutional Investors," based on a September/October 2020 online quantitative survey of approximately 600 institutional (including activist) investors (16% US), revealed noteworthy findings, particularly for public companies seeking to understand the leading factors that will build - and engender trust and strengthen their relationships with - their investor base.
Key US-specific takeaways include:
- Given the impact of COVD-19 on the economy, nearly 80% of US investors say their firm is currently deprioritizing ESG as an investment criteria, and 77% of US investors say the companies they invest have deprioritized ESG initiatives (Q2). However, investors overwhelmingly expect to increase their prioritization of ESG initiatives as we recover from COVID-19 (Q26).
- Investors for the first time ranked Social matters as the most important of the three "E," "S," and "G" components for purposes of ESG investing (up 15% from 2019), followed by Governance in the #2 slot, and Environmental, which ranked #3 in importance (Q10).
- A majority of investors say they are engaging with boards (more so than the IRO or other company management) on ESG issues (Q16). Likely topics of sought-after engagement over the next six months include HCM, employee health & safety, D&I, and corporate culture (Q19). Among a list of 10 enumerated ESG topics, investors most commonly expect boards to oversee employee health & safety, social issues in their local community, HCM, and data privacy & security (Q18).
Globally, investors rely on multiple ESG disclosure frameworks, as shown here:
The most common ESG rating agencies investors use to inform their investment decisions among an enumerated list of 10 providers are Bloomberg, ISS ESG, Sustainalytics, and CDP (Q23).
See Edelman's release and Top 10 Insights, and these articles from Corporate Secretary and Minerva. This post first appeared in the weekly Society Alert!