The ‘S’ of ESG | moving from interest to action

The Investing for Tomorrow society working group explored societal issues in the context of the investment industry. The group covered 3 topics over the year:

  • Inequality
  • Just Transition
  • Moving from interest to action

The exploration was motivated by a shared belief among the members that the ‘S of ESG’ had not received, to date, the attention and priority it warranted. The purpose of the exploration was to uncover strong arguments for addressing the historic deficit in attention and also practical actions that could be taken.

One of the main conclusions of this study is how deeply interconnected multiple issues are. Climate and societal issues differ significantly and run in parallel, but at the same time, they overlap and affect each other. Just transition and inequality have an important intersection and the group’s view is that the transition will not occur if it is inequitable. Similar to the idea that decarbonising one’s own portfolio does not protect against climate risk if the rest of the world does not decarbonise, the global north may be able to afford the transition to clean energy, but will still face climate change if the global south cannot afford the transition.

The climate problem is not a technical problem requiring a technical solution, it is a human-caused problem requiring a human-centred response. We see inequality and justice as intrinsically intertwined with climate, therefore, requiring a joint and simultaneous solution.