OECD Business and Finance Outlook 2020
Sustainable and Resilient Finance
The OECD Business and Finance Outlook is an annual publication that presents unique data and analysis on the trends, both positive and negative, that are shaping tomorrow’s world of business, finance and investment. The COVID-19 pandemic has highlighted an urgent need to consider resilience in finance, both in the financial system itself and in the role played by capital and investors in making economic and social systems more dynamic and able to withstand external shocks. Using analysis from a wide range of perspectives, this year’s edition focuses on the environmental, social and governance (ESG) factors that are rapidly becoming a part of mainstream finance. It evaluates current ESG practices, and identifies priorities and actions to better align investments with sustainable, long-term value – in particular, the need for more consistent, comparable and available data on ESG performance.
Corporate governance and the management of ESG risks
At the very heart of a sustainable and resilient economy is a dynamic business sector that is willing and able to assume risk. To finance and manage risk taking is therefore as old as the corporate form itself. As new types of risks emerge or become more salient, the company, its shareholders and society at large all have an interest that these risks are properly managed and disclosed so that scarce resources can be allocated in the most efficient manner. In recent years, this has brought increased attention to environmental, social and governance risks that may influence corporate and economy wide resilience. This chapter address the outlook with respect to evolving tools and corporate practices for managing ESG risks and the challenges that remain with respect to establishing a commonly accepted high quality framework for disclosure of comparable, consistent and verifiable data.
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