This part of the Decade of Transition series focuses on the “G” of ESG investment—how governance is increasingly influenced by investors engaging with companies about their impact on the world.
When it comes to creating a more sustainable world, businesses are on the front line. To help the world recover from the pandemic and address the huge challenge of climate change, companies need robust structures in place. Corporate governance will be crucial in this decade, as it shapes how companies are run and how effectively they respond to challenges.
When integrating ESG into investment strategies, corporate governance is often the starting point, largely because investors understand that governance is the primary non-financial factor that affects financial performance.
A 2019 study by the Diligent Institute found that the top fifth of performers on corporate governance in the S&P 500 index outperformed the bottom fifth by 15% over a two-year period.
Bloomberg Media in partnership with AXA IM, Commentary, “The value of corporate governance in a more sustainable world“