Emergence from COVID will amplify ESG investing in 2021 - Moody's

  • Environmental, social and governance issues will assume greater importance this year, with four trends converging, analysts at Moody's say.
  • Recovery from COVID will increase focus on social and environmental challenges.
  • "Major economies will attempt to integrate their economic recovery and job creation initiatives with longer-term efforts to reduce carbon emissions," analysts led by James Leaton write. "Green stimulus packages are attaching environmental conditions to bailouts or focusing on the development of low-carbon services and technologies, like electrified transport."
  • Energy and emissions targets in the U.S., EU and China will converge again.
  • "A raft of Biden executive orders has already started aligning the US with international climate objectives," Moody's adds. "China ratcheted up its 2030 commitments in its revised Nationally Determined Contributions at the end of 2020 under the Paris Agreement."
  • Financial system facing new landscape of transparency requirements.
  • "A growing landscape of sustainability standards and disclosure requirements through the financial and corporate systems will expose financial flows to greater scrutiny and oversight."
  • Corporate governance initiatives to increase board diversity.
  • "California's expansion of board diversity requirements beyond gender-related mandates offers insight into what may emerge on a broader scale in Western capital markets."
  • ESG ETFs include: SUSA, DSI, SPYX, ESG, SDG, ETHO, VEGN, SUSL, GRNB, NACP, SNPE, ESGG, USSG, TOK, VETS, ECLN, VEIGX, YLDE, EASG, JCTR, EMSG, ESNG, IQSU, NUBD, SDGA, NULC, JSTC, IQSI
  • CME Group analyzed the trends of ESG investing in 2020.

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