Time to Separate the G from ESG, Argues SquareWell Partners

Garnet Road of IR Magazine covers SquareWell’s latest memo “Reframing ESG”. Governance should be viewed as the means of facing environmental and social risks and opportunities – not as an isolated element. Part of this melding of E, S and G is down to the growth of passive investments, as well as the growth of the ESG industry.

These two trends have had the ‘unintended consequence’ of driving a focus on sustainability as a disclosure item, rather than as a matter requiring strategic deliberation within the boardroom. ‘In contrast to this, by virtue of their investment strategy, only active managers are able to identify those companies that are communicating an integrated strategy that aims to capture the risks and opportunities presented by global trends and, therefore, attribute a lower valuation to those that don’t,’ SquareWell believes.

The full article can be accessed here.