IJ Global: The ESG Policy Tsunami

General/ 21 December 2020

If sustainable investing reached a high-water mark in 2020, then the level of investor enthusiasm shows no sign of receding in 2021. But a new force is looming on the horizon: EU regulators and the incoming sustainable finance package.

Institutional investors – notably publicly-backed pension funds – are more vocal than ever before about their commitment to sustainability. And they are being heard – given the vast amounts of capital they supply to Wall Street and the City. Environmental, social and governance (ESG) issues have become a prerequisite for investing, and in no year has that been clearer than in 2020.

“In our experience, in terms of the intensity of interest from investors and also the requirement of investors to evidence ESG performance, I’d say 2020 bears no real comparison to 2019 or 2018,” says Jonathan Maxwell, chief executive and founder of London-based Sustainable Development Capital LLP (SDCL).

“There would be plenty of investors with us that could not, and would not, have invested had it not been an ESG-compliant proposition. And that is completely different from the world two years ago.”

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