A strong ESG score requires both actual improvement and communication of it
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Insights A strong ESG score requires both actual improvement and communication of it 22-06-2021 Sustainability has become the norm in financial markets, driving a massive demand for ESG data and services. Nordea's Head of Sustainable Finance Advisory Jacob Michaelsen reflects on h
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4 itemsPrioritise substance over form in your ESG work
The desk posits that corporate ESG (Environmental, Social, and Governance) practices have become crucial to investment strategies, reflecting a shift in institutional priorities towards substantive assessments rather than superficial compliance. Per the full note from Nordea Insights, Marco Kisic and Viktoria Voskressenskaia emphasize that genuine ESG performance significantly enhances corporate value creation, underscoring the necessity for companies to focus on long-term societal benefits. The notable increase in ESG interest over the past few years suggests this trend will persist, indicating that firms must adapt to evolving investor expectations. With the market's ongoing evaluation of sustainability practices, a proactive ESG alignment is paramount for investor confidence and corporate resilience.
Active ESG ownership generates improved returns and increased sustainability
The desk believes that active ESG ownership is not only a pathway to improved sustainability but a mechanism for enhanced financial returns, a theme underscored by Nordea's research. Per the full note, the concept hinges on investors engaging with companies to improve their ESG scores, which ultimately secures long-term investor value. As Nordea's findings suggest, better ESG scores translate into increased company value and returns for investors, a compelling argument for integrating ESG factors into investment strategies. With no significant calendar events on the horizon, this investment sentiment is positioned to resonate without immediate disruption.
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