Investors see long-term financial benefits in companies with high ESG ratings

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Laurence Fink, whose BlackRock has US$4.6 trillion under management and US$200 billion in sustainable investment strategies, also made a point that mirrors the argument made by many investors who track ESG performance: handling ESG issues well is often a sign of operational excellence at a company.

Our survey of investors found broad support for ESG-related themes expressed in the Fink memo. More than 80% of the survey respondents agreed with four statements related to Fink’s points:

  • That CEOs should lay out long-term board-reviewed strategies each year
  • That companies have not considered environmental and social issues as core to their business for far too long
  • That generating sustainable returns over time requires a sharper focus on ESG factors
  • That ESG issues have real and quantifiable impacts over the long term

 

EY - Nonfinancial performance may influence investors - Figure 1

 

Institutional investors have developed a greater appreciation for the value of ESG factors in the past several years. Three years of survey data, interviews with investors, and recent events and global initiatives offer evidence that ESG information plays an increasingly influential role in investment decision-making.

 

EY - Nonfinancial performance may influence investors - Figure 2