ESG-aligned investments that outperformed in 2020 laid the groundwork for increased uptake this year, as recovering from the global COVID-19 pandemic will be emphasized, according to ISS ESG's annual global outlook report.
The report, Volatile Transitions – Navigating ESG in 2021, also found that labor and human rights risks linked to supply chain stoppages are a high priority for global investors.
Released Monday, the report looks at diverse global and regional ESG issues in various investment markets and identifies 10 global trends for responsible investors in 2021, in terms of impacts on portfolio risk/returns, and time spent managing policies and stakeholder relationships.
This year's outlook also has locally focused reports for the Americas, EMEA, Asia and Australia/New Zealand. The Americas report covers several notable events in 2020, including the Biden presidency and the Black Lives Matter movement. Along with growth in ESG funds, it predicts that 2021 "sees the stage set for the U.S. to move from climate pariah to leader."
Increased awareness of biodiversity, diversity and inclusion will be emerging issues for U.S. responsible investors, "and the good news is that good practices in this space are linked with positive portfolio outcomes, and that there are plenty of tools to help investors achieve their goals," the Americas report said.