Analysis shows that ESG is poised to go mainstream

According to Thomas Kuh, two factors– the Internet,and the perception of ‘sustainability’ as a positive attribute for organizations – have led to the current wealth of information about companies’ ESG profiles, and new financial tools for analyzing their investment potential. But this situation has only existed since around the year 2000.“That’s when the business really shifted from information gathering to analysis,” he says, because clients were no longer just looking for information, but wanted “a perspective on what that information meant.”

While the analytical side of ESG finance has really taken off, there are important new areas to be explored if ESG is to continue to prove itself valuable. “We are just at the very beginning of being able to … identify the key performance indicators that are relevant to these [ESG-focused] companies,” he says. However – analyzing the trajectory of ESG concerns over the past decades – the future looks bright. “There is evidence that…over the course of the next five to ten years we can expect to see a pretty dramatic adoption of sustainability and ESG strategies,” concludes Kuh.

References

This video interview was recorded in New York City on 13 December 2011 during the ESG USA 2011 Conference “Investing for a Sustainable Economy,” organized by the Responsible Investor in association with Bloomberg.

This article may be reproduced according to our terms of use with attribution (and link, if online) to www.tias.edu. To be cited as: “Analysis shows that ESG is poised to go mainstream”, Thomas Kuh, www.tias.edu, February 23, 2012.

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Low-res video (mp4)
Audio transcript (mp3)