Observed and expected impacts of the current financial crisis on the investment industry's consideration of ESG and climate-related issues
 

Author: Ivo Knoepfel (onValues)

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Summary

This paper assesses potential impacts of the current financial crisis on the investment industry's efforts to integrate environmental, social and governance (ESG) issues in general, and climate change issues in particular, in its products and processes. 

Over the short-term the author expects set-backs in financial market actors' efforts to integrate ESG and climate issues. These set-backs will be particularly pronounced if the crisis persists for a longer time period, i.e. if financial markets do not stabilise by the end of 2009. The Copenhagen Climate Conference in December 2009 could become the 'make or break' tipping point for the financial market's continued efforts to integrate ESG and climate issues, at least for the short- to mid-term. The mid- to long-term prospects for ESG/climate risk integration, on the other hand, could be positive given a series of strong underlying trends, among others the change in attitude of the US market and the increasing manifestation of the financial implications of environmental and climate change impacts.