ESG- Finding and Measuring Impact

Environmental, social and governance (ESG) has gained significant attention among investors and regulators over the last year. However, the lack of standardization of ESG metrics is creating confusion and hindering wide-scale adoption of ESG into investment strategies. The purpose of this report was to evaluate the growing consensus around ESG standardization and coalesce the varying standards currently applied in today’s global market to identify those that are likely to gain favor in the future. In conducting research for this report, the Columbia University team interviewed more than a dozen asset managers, asset owners and service providers from the U.S., UK, Europe, Latin America and Asia Pacific (Japan). The team also leveraged a rich body of academic research and publications from industry experts. Section I of this report begins with an overview of the ESG landscape, including the relevance of ESG investing with respect to the United Nations Sustainable Development Goals and key controversies of ESG such as greenwashing. Section II offers an overview of why ESG standardization matters and the advantages and disadvantages of standardization. Section III analyzes major ESG regulations, frameworks and standards across different geographic regions, from the U.S., UK, Europe, Latin America, and Asia Pacific. Finally, Section IV provides a discussion on the outlook of trends related to ESG standardization, regulations and approaches.