Sustainability transitions in the East: ESG investment mentions grew fastest in Asia-Pacific companies in 2021, shows GlobalData report
- Businesses worldwide need to divert substantial investments to achieve United Nations’
sustainable development goals(SDGs) by 2030.
- A report by GlobalData found that mentions of ‘investment’ in companies’ environment, social, and governance (
ESG) reports have been steadily growing since 2016.
- Firms in the Asia Pacific region saw the highest sequential growth of nearly 30% in
AdvertisementClimate change, environmental crisis, social inequality, and livelihood predicaments are all deepening day by day. Therefore, there is an urgent need for not only the governments but also the corporate sector to invest in sustainable development goals (SDGs).
Fortunately, more and more global companies are now focusing on meeting sustainability. A report by GlobalData found that mentions of ‘investment’ in companies’ environment, social, and governance (ESG) reports have been steadily growing since 2016.
And firms in the Asia Pacific region saw the highest sequential growth of nearly 30% in ESG investment mentions.
What are sustainable development goals (SDGs)?
SDGs are a set of 17 global goals which aim to achieve a better and more sustainable future for all. No poverty, zero hunger, clean water and sanitisation, gender equality, and climate action are some examples of SDGs.
Sustainable development is among the most-effective business strategies as it brings numerous opportunities for socio-economic growth as well as better environmental outcomes. It not only covers broad challenges such as economic inclusion, geopolitical instability, and the impact of climate change but also addresses risk, attracts capital, and drives growth.
A report by the Business & Sustainable Development Commission revealed that sustainable business models related to the SDGs could open economic opportunities worth up to $12 trillion and increase employment by up to 380 million jobs by 2030.
Growing mention of investment in ESG reports
The term ‘ESG’ as an approach to evaluating corporate sustainability was first coined in 2005 in a landmark study entitled "Who Cares Wins". In 17 years, the ESG movement has grown from a social initiative into a global phenomenon representing an asset value of $35 trillion.
“Interest of APAC-headquartered companies in ESG seems to have increased as indicated by the rise in mentions of ‘Investment’ per company rising in double digits. In 2021, nearly 24,000 APAC-based companies discussed investment in respective ESG reports.,” said Rinaldo Pereira, business fundamentals analyst at GlobalData.
Estimates of global ESG assets' value in 2025 exceed $53 trillion. With investors likely to scrutinise company-driven sustainable investments, firms seem to be directly pointing at ESG initiatives and investments to garner more interest, explains Mr Pereira.
“While environmental aspects continue to be at the centre of discussions, companies are also discussing diversity and inclusion and health and safety to meet specific SDGs. The number of companies discussing ‘mental health’ in respective filings also rose by over 40%, as firms are trying to limit attrition rates with a focus on employees,” Pereira said.
AdvertisementAccording to the report, each region witnessed a jump in investment-related mentions in ESG reporting per company in 2020 during the COVID-19 pandemic, and APAC and Europe saw the highest growth in 2021.
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