Environmental, social and corporate governance are main factors when evaluating sustainability and societal impact of any corporation. It is in the core of analysis that investment companies perform when determining the future performance of the firm under consideration. In the times of crisis, investors will be scrutinizing corporate ESG practices even more, as risks increase and opportunities are diminishing. During this time, investors will be interested in ensuring higher degree of accountability and more socially conscious strategic decision making expected from the management.
- During crises like the coronavirus pandemic, investors should help companies move forward by investing with a critical eye.
- There is an even bigger focus on the social side of investing now due to the crisis.
- Companies should strive to make ESG investing policies moving forward to help cope with future disasters.
“In times of crisis, like the 2009 financial crisis or COVID-19, investors are compelled to take a closer look at corporate governance practices like disaster contingency plans, cybersecurity risk management and decisions about capital structure — [such as] share buybacks & M&A activity.”