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OECD Business and Finance Outlook 2020

Sustainable and Resilient Finance

image of OECD Business and Finance Outlook 2020

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.

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Making sense of the environmental pillar in ESG investing

Growing demand for environmental, social and governance (ESG) investing has been driven in part by investors seeking to enhance long‑term value, and align with environmental resilience. To this end, environmental (E) pillar scores and indices produced by rating providers and investment funds strive to integrate metrics aligned with environmental performance, climate risk mitigation, and strategies towards renewable energy. This chapter assesses the landscape of criteria and measurement within the E pillar of ESG investing, to understand if it is fit for purpose in its current form.

English

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