Institutions and financial professionals around the world are increasingly factoring in environmental, social and governance (ESG) risks and opportunities to their decision making process, reflecting a view that companies with sustainable practices may generate stronger returns. ICE Data Services has a range of ESG data and tools to help you gain transparency into the impact of key ESG issues, uncover opportunities and manage risk.
ESG & financial performance
It has often been debated whether you have to sacrifice returns for ESG integration. However, a recent Bank of America (BofA) study showed that an investment strategy focused on buying stocks that rank well on ESG metrics could outperform the market by up to 3 percentage points per year over the last five years*.
Rising investor interest
As ESG investing moves from niche to norm it’s estimated that over the next two decades $20 trillion of asset growth will occur in ESG funds – this is equivalent to the size of the S&P 500 today*. Women, millennials and high-net-worth individuals are thought to be part of the demographic drivers of this trend.
Risk & regulation
Demand for companies to be more transparent in how they manage ESG issues is not only coming from investor interest, but also the evolving regulatory environment. Policymakers globally are continuing to develop new regulation promoting disclosure of ESG metrics and the management of climate risk. Companies that don’t address these changes or manage their ESG risks (climate change, corruption etc.) could incur costs to the bottom line, which may ultimately harm long-term earnings.
* 10 reasons to care about ESG Investing, BofA Merrill Lynch, 2020
Better understand the ESG risks and opportunities of globally-listed corporations with our ESG Reference Data which provides detailed ESG attributes and indicators.
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A range of solutions for fixed income sustainable benchmarks that account for ESG factors in addition to other criteria.
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ICE Data Services provides content on a range of ESG derivatives markets including ICE Environmental Markets.
A dedicated hub of ESG content and insights to serve as a resource to help NYSE-listed companies determine the best path for ESG disclosure.
Listen to our Market Pulse webinar on ESG with BofA’s Savita Subramanian.
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