ISS ESG Report Assesses Key 2024 ESG Opportunities and Risks for Investors at Mid-Year Mark

Report reviews mid-year trends for investor focus likely to impact portfolio risk-return

NEW YORK (July 30, 2024) — ISS ESG, the sustainable investment arm of ISS STOXX, today released Actionable Insights: Top ESG Themes in 2024 — Mid-Year Review as a complement to its Actionable Insights: Top ESG Themes in 2024 — Global Edition report published in January. The new report draws on comprehensive ISS ESG data, with research and insights from ISS ESG’s financial research and sector leads, climate specialists, and regulatory experts, to help investors assess the extent to which key ESG risks and investment opportunities, identified in January as likely to impact their portfolios in 2024, have been actionable so far this year.

Following the form of a “catalogue of mid-year reviews,” each of the chapters in the original report has been reviewed in the new report according to an identical structure. This approach examines notable developments in the first half of 2024 and then details expected implications for investors in the second half of 2024.

Key takeaways from the ISS ESG mid-year analysis include:

• The first half of 2024 has seen a steady expansion of corporate sustainability disclosure requirements globally. In parallel have come steps to harmonize reporting standards for corporate sustainability disclosure.
• The market this year has embraced the view of a soft landing, with investors positive on the outlook for higher profits, higher economic growth, and lower risk. Investors may be seeking a more balanced portfolio that exhibits quality as well as companies that have room for improvement. This trend may continue in the second half of 2024, combined with a tilt towards quality.
• Environmental risks, whether related to climate change, loss of natural capital and ecosystem services through deforestation, or the risks posed by Perfluoroalkyl and Polyfluoroalkyl Substances (PFAS), remain major spurs to regulation and help shape the context for many investors.
• Technological advancement, whether increasing digitalization or the spread of AI, poses both opportunities and risks. For example, various forms of digitalization have the potential to make healthcare delivery more efficient, accessible, and affordable, but they also risk privacy breaches and damage to healthcare infrastructure. AI may similarly pose privacy and safety concerns but can also deliver a positive impact in hiring.
• Being attentive to ESG issues can include looking at value chains. The environmental impact of value chains is among the concerns addressed by the newly formed Taskforce on Nature-Related Financial Disclosures (TNFD). Digitalization means companies need to look beyond their own data protection practices and dive deep into the companies with which they are sharing this information.
• Increased demand for greater transparency and accountability within alternative asset classes is likely to persist both through regulatory requirements and industry or market initiatives. Enhanced ESG data availability within alternative asset classes may provide two structural opportunities: the dissipation of the frontier between Sustainable Investments and Impact Investments; and an occasion for investors to review and assess their alternative portfolios with an impact lens.

Bonnie Saynay, Global Head of ESG Investor Research at ISS ESG, said: “In the latest report, ISS ESG’s proprietary data and research team, with significant capital markets experience and sectoral expertise, holds its analysis to account six months on, to provide structured, actionable intelligence and support for investors, helping them to evaluate and prioritize complex ESG risks and investment opportunities.”

To download a copy of the full report, please click here.

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About ISS ESG

ISS ESG solutions enable investors to develop and integrate sustainable investing policies and practices, engage on sustainable investment issues, and monitor portfolio company practices through screening solutions. It also provides climate data, analytics, and advisory services to help financial market participants understand, measure, and act on climate-related risks across all asset classes. In addition, ESG solutions cover corporate and country ESG research and ratings enabling its clients to identify material social and environmental risks and opportunities. For more information, please visit us at: www.iss-esg.com.  

About ISS STOXX
ISS STOXX GmbH, through its group companies, is a leading provider of comprehensive and data-centric research and technology solutions that help capital market participants identify investment opportunities, detect qualitative and quantitative portfolio company risks, and meet evolving regulatory requirements. With roots dating back to 1985, we today deliver world-class benchmark and custom indices across asset classes and geographies and serve as a premier source of independent corporate governance, sustainability, cyber risk, and fund intelligence research, data, and related offerings. Our products and services give clients the scale and leverage they need to grow their business more effectively and efficiently. ISS STOXX, which is majority owned by Deutsche Börse Group, is comprised of more than 3,400 professionals operating across 33 global locations in 19 countries. Its approximately 6,400 clients include many of the world’s leading institutional investors who turn to ISS STOXX for its objective and varied offerings, as well as companies focused on ESG, cyber, and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS STOXX’s expertise to help them make informed decisions to benefit their stakeholders.

Media Contact:
Sarah Ball
Executive Director, Communications
ISS STOXX
press@iss-stoxx.com