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As ESG investing has proliferated in recent years, so have the number of standards, definitions and strategies, resulting in a confusing morass that hamstrings sustainable investors.
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That’s according to the Organisation for Economic Co-operation and Development, which said in its annual business and finance outlook, published on Tuesday, that while consideration of environmental, social and governance issues is rapidly “becoming a part of mainstream finance,” there is “little common understanding” on “what the goals of ESG investing are or should be.” While most investors seek to incorporate ESG factors to better manage risks and improve returns, they lack the tools needed to do this efficiently, including consistent data, comparable metrics and transparent methodologies, the OECD said.
Sustainable investing has grown rapidly in recent years, with