The financial crisis of the late 2000s showed the damage that can occur when capital markets fail.

With climate change, resource scarcity and other megatrends trends posing a major risk to future global financial stability, investors can no longer assume that economic growth will come from the same industries that dominated the 20th century. In response, investment that takes environmental, social and governance factors into account – known as ESG investing – is on the rise, but still only represents a small proportion of global investments.

What is the best way to accelerate the growth of ESG investing and make it mainstream to ensure a focus on the long term, and stabilize our capital markets?

What is the ESG Path to Value Forum?

The ESG Path to Value Forum is an industry-only Forum that explores how can we make our capital markets more stable and focused on the long term. Participants of the Forum meet to explore how they and other key actors in the financial sector can make investment decisions that create long-term value for business and society.

By bringing together investment industry thought leaders with asset owners and managers across asset classes, the High Meadows Institute has facilitated the creation of a valuable platform for candid conversation and peer-to-peer sharing. Over 100 participants from 30 organizations have taken part in the Forum’s events and webinars since they started in 2015.

The Forum is a part of the Future of Capital Markets project, a wider project that seeks to address the challenge of unstable capital markets.

Related Resources:

The Role of Trade Associations in ESG

High Meadows Institute (Spring 2019)

While ESG integration has been widely explored from company, investor, and broader capital market perspectives, there has been less focus on the role of trade associations in ESG integration and their influence on regulation and policy development on ESG issues such as climate change.

This research note, prepared by KKS Advisors, shines a light on the role that trade associations play in promoting and inhibiting the integration of ESG in business practices and reporting. It examines the ways that companies currently disclose their trade association memberships and identifies barriers to increased disclosure and transparency. Specifically it makes a case for why investors should pay attention to a company’s trade association memberships.

ESG Across Asset Classes

High Meadows Institute (Winter 2017)

Despite the growth of ESG Integration as a mainstream investment tool, investment professionals are still challenged on how to integrate environmental, social and governance issues for several reasons: a lack of standardized data, heterogeneous notions of materiality, variability of material ESG issues by asset class, and the holding period of the underlying investment strategy.

This report shares how three leading asset managers and a large state pension fund implement ESG integration for public equity, real estate, private equity and fixed income investments. This panel also shared its opinions on the latest evolving trends/area of innovation and how active ownership differs from shareholder activism.

ESG Integration Practices of Sell Side Analysts

High Meadows Institute (Spring 2017)

How do sell side analysts currently consider ESG factors in the valuation of companies? And importantly, how can they be encouraged to consider these factors to a greater extent?

This report, prepared for the Institute by KKS Advisors, includes results from a survey of 365 sell-side analysts and detailed follow-up interviews. It sheds light on how analysts make decisions, and how certain incentives can influence these decisions.

Incorporating ESG Considerations into Engagement Practices 

High Meadows Institute (Spring 2017)

Which strategies are most effective in encouraging mainstream investment managers to incorporate ESG factors in their engagement practices?

This report, prepared by KKS Advisors, includes an analysis of private and public engagement strategies, and is illustrated by case studies from ESG Path to Value Forum participants.

ESG Integration in Investment Management: Myths and Realities 

Sakis Kotsantonis – KKS Advisors, Chris Pinney – High Meadows Institute, and George Serafeim – Harvard Business School (Journal of Applied Corporate Finance, Spring 2016)

In this article, the authors discuss six common myths around ESG investing and present the major challenges that prevent widespread ESG integration in mainstream investment.