Financial services, power, oil & gas and pharma are top sectors discussing ESG investment in 2022, says GlobalData

According to recent analysis of investment discussions within ESG* company filings, GlobalData has found that companies within the financial services, power, oil & gas, and pharma sectors are discussing ESG investment opportunities more frequently in 2022, compared to other industries. The leading data and analytics company names Credit Suisse, NatWest Group, Enel SpA, Exxon Mobil, and Novartis AG among the companies that had mentioned ESG-related keywords the most within investment discussions.

Rinaldo Pereira, Business Fundamentals Analyst at GlobalData, comments: “Financial services companies mentioned ‘Climate’ the most in 2022 ESG filings, with discussions largely focusing on which invests can help prevent climate change and which partnerships could help their clientele address low-carbon initiatives. How to reduce the impact of loans, investment offerings and insurance products on the climate were also points of discussion.”

These findings also support the findings of GlobalData’s report, ‘ESG (Environmental, Social, and Governance) Strategy Survey 2021’, released earlier this year, which noted that these industries ranked highly against other sectors in questions around the impact ESG would have on their business, the role ESG would play in their investment decisions, and whether they would increase investment to meet ESG goals. For example, 91% of power ESG executives expected that their companies would increase investment in ESG in the next five years (followed by 88% for oil & gas, and 82% for pharma**).

Luke Gowland, Thematic Analyst at GlobalData, comments: “Financial services, power, oil & gas, and pharma are some of the highest exposed to ESG in terms of their business models and regulation, so it is good that they’re aware of the issue and talking about the importance of ESG. However, caution must be taken. I’d take everything these companies say about ESG in their filings with a pinch of salt, they may be using their filings as an opportunity to greenwash investors and the public, for example.”

GlobalData’s Company Filings database also identified ‘Employees’, ‘Governance’, and ‘Customers’ as other keywords linked to ESG investment.

Pereira continues: “It is interesting to see companies talking about employee investment, especially in terms of increasing diversity, training and digital capabilities. The digitalization trends of 2020 and 2021 seem to have spurred focus on the digital capabilities of employees in 2022.”

Discussions in the financial services and oil & gas sectors included the ‘governance’ portion of ESG, with companies highlighting the importance of transparent corporate governance.

Pereira adds: “With ESG becoming increasingly important for customers and investors alike, transparent corporate governance, ethics, and credibility were key topics of interest for companies discussing ESG investment. Furthermore, ‘Suppliers’ appeared as a key word in investment discussions in ESG filings, highlighting that companies use an ESG lens before supplier-related investment.”

Gowland continues: “All companies are now under pressure to reduce their scope 3 emissions, and disclosing these figures is increasingly being required by the major reporting frameworks (TCFD, CDP, SASB etc). So, with that in mind, companies are choosing to buy from or partner with companies that can demonstrate a commitment to ESG—although price will always be a big influencer.”

* ESG = Environmental, social and governance; analysis was undertaken on companies that released ESG-specific company filing documents up to 13 June

** Financial services was not present in this survey, but it is noteworthy that banking & payments ranked highly at 85%.

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