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WHY ESG MATTERS

ESG matters to companies and investors who want to advance the social values ESG represents. It also matters to the bottom line.

 

The movement has gained traction as larger institutional investors – such as BlackRock and Vanguard – are looking at ESG metrics to inform their own investments, which in turn affects a company's long-term value. A company's ESG metrics can affect its credit rating, interest rates, or insurance premiums.  S&P Global Ratings, for example, publishes specific ESG factors they consider when establishing credit ratings. Dun & Bradstreet publishes ESG rankings for companies, comparing them to others in the same industry.  See Dun & Bradstreet's ESG Rankings Dataset: Context, Methodology and Applications.

In addition, private investors are also looking at evidence of a company's social responsibility before making their own investment decisions. As You Sow, which touts its reputation as the "leading corporate watchdog," has created and published a relatively sophisticated ranking of various companies based on specific criteria, such commitment to climate change and gun control.