The continuing impact of the COVID-19 pandemic has made systemic ESG shifts more tangible, Moody's Investors Service said Thursday in its quarterly ESG Focus report.
There is an economic recovery underway, the report said, but it will be closely tied to how well the pandemic is contained. Moody's is projecting a 4.6% contraction in GDP for G-20 countries this year, followed by 5.3% growth in 2021.
Even when the pandemic subsides, companies will have to invest more in safety measures. Environmental and governance issues will also pose credit risks, according to the report, which looks at credit risks in the context of rising sea levels, renewable energy demand, travel and tourism, and corporate governance assessments.
The pandemic has accelerated the transition to a low-carbon economy, with some governments tying financial support to environmental priorities, including rescue packages for European airlines.