Global Investors And Directors Respond To Climate Change
Environmental, social, and governance (“ESG”) issues, long considered niche, are now core material concerns of investors and boards of directors alike, according to a survey conducted by the Ira M. Millstein Center for Global Markets and Corporate Ownership at Columbia Law School and LeaderXXchangeⓇ.
A team of academics from the Millstein Center and experts at LeaderXXchangeⓇ surveyed more than 130 investors and directors in Europe and North America to understand whether and how institutional investors and board directors incorporate climate-related issues in their investment decision making and their oversight responsibilities.
More than 60% of directors and 70% of investors surveyed indicated that climate risk is already impacting their business today. Other key findings, detailed below, reveal not only that both groups find ESG issues to be material, but that there are certain demographic and regional differences within each group’s views. For additional information, see the full report on the survey findings here and the executive summary here.
Eric Talley, the Isidor and Seville Sulzbacher Professor of Law at Columbia Law School and co-director of the Millstein Center, stressed the importance of gathering evidence to understand how the global business community is taking climate change into account. “Corporations are being urged by commentators and policy makers alike to serve the interests of all of their stakeholders (not just shareholders), and climate has been an important part of that conversation. We hope that this survey will serve as an important start to understanding how investors and directors are responding to that pressure and the business impacts of climate change.”
Sophie L’Helias, President of LeaderXXchangeⓇ, said “We are delighted to have partnered with Columbia Law School’s Millstein Center to jointly conduct a first of its kind global survey on climate risk that breaks silos separating investors and board directors. By identifying gaps to close, we hope to achieve meaningful impact and contribute to building a bridge of shared knowledge on a critical topic for investors and companies alike.”
Looking ahead, Professor Talley noted that the Millstein Center and LeaderXXchangeⓇ hope to continue studying the evolving views of directors and investors on climate and related issues. “Particularly in light of the onset of the COVID-19 pandemic across the globe,” he said, “it will be illuminating to see how the business community’s strategy around ESG adapts.”
Selected Key Findings
• Investors and directors believe climate change issues are material.
o More than 60% of directors and 70% of investors indicated that climate risk is already impacting their businesses today.
o 75% of respondents believe they hold an ethical obligation to incorporate climate risk into their strategy.
• Investors and directors view climate disclosure as a significant deciding factor.
o A majority of both groups indicated they view climate disclosure and financial reporting as equally important.
• Investors in Europe appear more interested in climate-related issues.
o 88% of European investors think that climate risk reporting is at least equally as important as financial reporting; only 67% of North American investors agree.
Source: Ira M. Millstein Center for Global Markets and Corporate Ownership
Confluence’s risk and performance solution will have coverage powered by J.P. Morgan’s analytics.
German exchange group acquires outstanding 49% stake from UBS.
Investors’ appetite for ETFs has grown dramatically over ten years of the Charles Schwab survey.
Euro-denominated green bond portfolio had higher returns on average over the last seven years.
In the first quarter ESG ETF inflows were 60% of total 2020 flows.