The rallying cry of the American Revolution – no taxation without representation – is today taken as self-evident but deserves a re-examination in light of the climate crisis and sustainable development and ESG efforts. In fact, it could be argued that the whole field of sustainability is an example of taxation without representation.
By market size alone, impact investing might be far smaller than ESG investing, but its unique profile makes it a critical part of sustainable finance. ESG assets are on course to hit USD$50 trillion over the next three years, while impact investments are gauged to hover around USD$1 trillion. This begs the question: as ESG continues its meteoric rise, what will happen to impact investing?
By now, it’s well established that ESG integration is not only good for the world but also good for business net win, in other words.Indeed, study McKinsey concluded that “the value at stake from sustainability (ESG) concerns can be as high as 70% of earnings before interest, taxes, depreciation and amortisation.” Put another way, up to 70% of a business’s potential earnings could be lost to ESG risks.
Indeed, a study by McKinsey concluded that “the value at stake from sustainability (ESG) concerns can be as high as 70% of earnings before interest, taxes, depreciation and amortisation.” Put another way, up to 70% of a business’s potential earnings could be lost to ESG risks.
