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Alternative Market Briefing

Institutional investors losing trust in companies' ESG and net zero commitments

Thursday, November 18, 2021

Laxman Pai, Opalesque Asia:

86% of U.S. institutional investors believe that companies frequently overstate or exaggerate their ESG progress when disclosing results, and 72% of investors globally don't believe companies will achieve their ESG commitments, said a study.

A survey released by Edelman said that investors agree that companies that excel in ESG merit a premium.

The research reveals new investor expectations on ESG, climate change, shareholder activism, employee activism, and the meme stock phenomenon. Among other insights, the findings show that investors now subject ESG to the same scrutiny as operational and financial considerations. However, investors are skeptical of ESG disclosures and commitments.

Further, 87% of respondents globally predict there will be more litigation coming as a result of companies breaking their ESG promises, said the fifth annual Edelman Trust Barometer Special Report which surveyed 700 institutional investors across seven global markets.

Meanwhile, 94% of U.S. investors anticipate more litigation as a result of companies not delivering on ESG promises. 94% of U.S. investors also expect companies to establish and communicate a net-zero plan - however, 92% are concerned companies are not effectively executing on these pledges.

Also according to the survey, investors believe in the empowered employee, identifying employee activism as an indicator of a healthy workplace culture.

95% of U.S. investors are interest......................

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