Christopher Saul Associates: ESG - The Challenge for PLCs

Environmental, Social and Governance (ESG) issues are highly topical for PLCs but they are complex and impressionistic and there is a real lack of clarity and consistency as to how best to address them.

The article discusses:

• the approach of investors - they are increasingly focussed on ESG and yet their interest will often come via “stewardship officers” rather than portfolio managers and thus not necessarily be seen by the corporates as integral to the value analysis. Activists, moreover, will be more interested in the short term than the long term and activist funds are increasingly distracting for PLC boards;
• the approach of the corporates themselves - some are thoughtful about the integration of ESG into the overall business strategy and risk analysis, and disclosure in the area is often impressive, but for many ESG still sits in a “sustainability cul-de-sac”; and
• ESG Ratings - which confuse rather than clarify

and presumes to offer some ideas in answer to the question “What to do?”