Five ESG Investing Trends to Watch in 2020

by Linda-Eling Lee, Global Head of ESG Research, MSCI; Meggin Thwing Eastman, Research Editorial Director, MSCI; and Ric Marshall, Corporate Governance Research (ESG), MSCI. 

ESG themes are long-term, but some can emerge with sudden force. We are watching Five Trends we believe will unfold in 2020 to catapult ESG investing into the new decade:

1) Climate Change Innovators: Spotting the Sleeping Giants

Solving the climate crisis is likely to take innovative technology, scalable deployment and a bit of luck. Many envision climate saviors coming in the form of plucky startups. But alternative data is hinting instead at big, established players, biding their time and quietly assembling an arsenal of climate solutions.

In 2020, investors turbocharge their use of alternative data to spot the companies plotting to take a lead in propelling us toward a carbon-free economy.

2) New Terms for Capital: Ready or Not, Here Comes ESG

Banks have stepped away from some gun makers, and investors have been keen to channel money toward green energy projects. But for the average, middle-of-the-road company, ESG has mostly been tossed to the corporate social responsibility office or used to prettify annual reports.

In 2020, ESG storms the CFO’s office, elbowing its way onto the bottom line as financiers get creative with ways to bind ESG criteria to their terms of capital, introducing a plethora of corporate borrowers into the wide world of ESG.

3) Re-valuing Real Estate: Investing in the Eye of the Hurricane

Wildfires, storms, floods, droughts, heat waves…. Just as real estate investors and managers begin to grapple with what climate change might do to their assets physically, now they may also have to contend with accelerating regulation. Location matters in real estate, and vast portions of the global property stock are in cities and regions marching towards zero-carbon building standards.

In 2020, greening the property portfolio will move from a nice-to-have reputation booster to an imperative in the face of a looming “brown discount” if real estate investors don’t kickstart their journey to zero carbon. 

Read the rest of the article that includes ESG Trends #4 and #5 along with useful charts and graphs, all here -  https://greenmoney.com/mscis-five-esg-trends-to-watch-in-2020

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