May 19, 2016

European, North American Firms Split on ESG Criteria

European investment firms gravitate toward environmentally-friendly companies, while those in North America seem more concerned with governance, according to a new study by Nasdaq Inc., the exchange operator and market information company. Asia-Pacific investors trail both their counterparts in an overall assessment of the environmental, social and governance, or ESG, characteristics of stocks in their respective portfolios. The study is useful to finance chiefs and other top level corporate executives, who must decide how to pitch their companies in roadshows to potential investors, according to Andrew Gilmore, director of advisory services at Nasdaq and co-author of the study. Mr. Gilmore said investment professionals he talked to view governance as the most critical component of ESG criteria. That’s because without good governance companies are hobbled in their efforts to maintain solid environmental and social records.

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