Sustainability gets a seat in the Boards

Environmental sustainability is becoming a long-term value for the boards of listed companies: it is what emerges from the latest Morrow Sodali's Institutional Investor Survey, the annual poll of over 40 institutional investors with $29 trillion in assets under management.

The survey revealed that in the 4th quarter of 2020, the trend of capital inflows in ESG-oriented investments reached a record $1.65 trillion, an increase of almost 29% from the 3rd quarter of 2020: a marked link between ESG performance and good financial performance of the companies.

In the interview with Legal Community Magazine, Andrea Di Segni explains that “in 2021 there has been a major attention to non-financial topics largely due to the pandemic.” ESG plays an increasingly important role in investment decisions: the report discloses that 95% of investors (compared to only 29% in 2018) would like to see ESG targets incorporated into the executive incentive plans.

“Investors have long believed that the ESG metrics and targets must be ingrained in the incentive plans,” highlights Andrea Di Segni. “According to our survey results, in 2021 there was a broader, more rigorous and more fit-the-context screening of the remuneration by the investors, also evaluating the behavior of the companies while facing the pandemic impact. Interestingly, to all appearances this trend of the investors' community will take hold in the coming years.”

“2022 will be pivotal: ESG and pay-for-performance topics will continue to dominate as a key pressure point for investors,” outlines Di Segni.

Read the full article here (in Italian).