The rise of environmental, social, governance, and sustainable investing is clear and bound to increase. But key questions remain as companies and financial institutions continue the push: What counts as progress, and how should it be measured?
Similar to the impact investing space, there are many different frameworks, metrics, and organizations working to define sustainability and determine how to measure it. But experts say the system needs to move toward a global standard, or else it risks mislabeling companies or investments as sustainable, green, or compliant with the Sustainable Development Goals when they are not.
Corporate and investor priorities are shifting from “short-term shareholder profit maximization” to stakeholder responsibility, so now is an important moment to establish a standardized framework, said Klaus Schwab, founder of the World Economic Forum.