Consumers and employees have increasingly different expectations, both of the businesses they buy from, and work for. Leaders are under pressure from regulators and the market to prove that their organizations are acting responsibly and acting sustainably. Now, more than ever, it’s important to embed ESG in their business strategy to build a resilient business set to thrive in the new reality and to play their part in making the world a more sustainable and better place for everyone.

The COVID-19 pandemic has forced many to reconsider the link between environment, society, good governance and profit. That has sharpened minds on the need for greater focus on ESG criteria and investments. Many also now see the disruption as an opportunity to rebuild greener economies.

How much of a priority is it? Since the COVID crisis hit, the UN Principles for Responsible Investing has seen a 35% increase in financial institutions agreeing to abide by their six principles.

What’s driving this shift in ESG prioritization? Part of it is due to the how concentrated the asset management industry has become with the top 10 firms holding 34% of all assets. Firms with tens of trillions of dollars under management find it difficult to hedge against potential negative impacts on the global economy from ESG issues. They cannot pass the buck and have come to realize that if the planet fails, so will their investments.

In 2022 ESG will be one of the most prioritized policies in Waveline Innovations.