ISS ESG, the responsible investment arm of Institutional Shareholder Services Inc. (ISS), today released its annual global outlook report, New Horizons – Navigating ESG in 2022, to kick off its ESG Themes and Trends 2022 thought-leadership series. Drawing on comprehensive ISS ESG data, analyst commentary, and qualitative research from ISS ESG’s global team of analysts, the new report provides a year-long resource and roadmap for investors in global markets seeking to navigate the potentialities of diverse global and regional ESG issues and their impacts across various investment markets. The Global report is complemented by locally focused reports for the Americas, EMEA, Asia and Australia/New Zealand regions.
Bonnie Saynay, Global Head of ESG Investor Research & Data Strategy at ISS ESG, said: “The New Horizons – Navigating ESG in 2022 report series demonstrates how ISS ESG’s proprietary data and unique research intelligence is critical to supporting investors who seek to identify dynamic material issues across global portfolios and better understand the impacts of ongoing and rapid shifts across the responsible investment landscape.”
• Responsible investment has moved from being a niche player to a mainstream investment proposition. While this move has been associated with record inflows and strong returns, it brings with it increased scrutiny from regulators and stakeholders. Can the sector step up?
• The increased prominence of environmental, social, and governance (ESG) factors in investment decision-making comes with increased responsibility to ensure that sustainable investment is demonstrating real-world outcomes.
• Stewardship practices are an important tool for investors seeking to deploy their influence in the furtherance of responsible investment strategies. While proxy voting has always been a key part of this process, corporate engagement is increasingly important for investors wishing to make sure their voices are heard.
• Regulation remains a major driver of the growth of responsible investment around the world, although it is important that governments are not so prescriptive as to stifle innovation. A focus on greenwashing means that investors will need to make significant improvements in their transparency through 2022.
• Environmental topics such as climate change, water use, and biodiversity are front of mind for investors, but the COVID-19 pandemic has driven awareness of the importance of the ‘S’ element of the ESG spectrum.
As the Global Sustainable Investment Alliance reports strong growth in funds managed responsibly around the world, the new ISS ESG global outlook report highlights research by ISS EVA establishing a link between companies that are well-governed and those that offer investors good quality returns, both for established and emerging markets. It further highlights the performance of ESG-themed indices continues to exceed expectations, with the ISS ESG US Diversity Index and the Governance QualityScore (GQS) Index family outperforming their benchmarks in almost all global markets.
Download the Global and regional reports here.