Calculating the Incalculable: Sustainable Investing and Innovations in Measuring ESG Parameters
Mr Nilesh Maurya
, Dr Vijay Singh Dahima
ESG, investments, ESG Ratings, Sustainability, Innovation
The world is changing and so is the environment that exists. If one looks over the past two decades the environment has drastically changed and has deteriorated to an extent that it requires a solution faster and sooner than expected. This has also created a lot of pressure on corporations and companies to be at their best and make policies that are sustainable in nature not just environmentally but socially as well. While most corporates are trying to find a balance between profitability and sustainability, in recent times, the investor community has also started demanding answers to the companies. This has given rise to responsible investing- where factors such as environmental, social and governance (ESG) are integrated into investment processes. While these words may be commonly used across the board, they cover a broader scope and spectrum of factors and issues which were conventionally used as a parameter of investing. ESG investing makes fund managers look beyond balance sheets and financial analysis in a way that it still makes financial relevance. This could include parameters as to how does a company manages its water resources, does it have effective health and safety policy or how does it draft its activities which are friendly to the environment and responsive to climate change. For fund managers, while these issues are worth considering, these factors are highly subjective and calculating the actual impact is quite difficult. A lot of rating agencies have tried to mitigate this subjectivity by introducing various ratings and metrics that are supposed to make the task easier for a fund manager to evaluate his or her investment based on ESG factors of sustainability. But instead of easing out, these ratings have often turned out confusing and also quite varying from agency to agency leaving the fund managers in dilemma as to which rating is closer to reality. This subjective terms of ESG calculations and confusing maze of rating has lead innovation to come to the rescue. A lot of companies today are using innovative methods to fill the gaps of ambiguity which range from big data, data analysis to as unique as geospatial analysis thus promising a better and more sustainable future for investing.
"Calculating the Incalculable: Sustainable Investing and Innovations in Measuring ESG Parameters ", IJSDR - International Journal of Scientific Development and Research (www.IJSDR.org), ISSN:2455-2631, Vol.5, Issue 9, page no.506 - 510, September-2020, Available :https://ijsdr.org/papers/IJSDR2009085.pdf
Volume 5
Issue 9,
September-2020
Pages : 506 - 510
Paper Reg. ID: IJSDR_192536
Published Paper Id: IJSDR2009085
Downloads: 000347214
Research Area: Management
Country: Mumbai, maharashtra, India
ISSN: 2455-2631 | IMPACT FACTOR: 9.15 Calculated By Google Scholar | ESTD YEAR: 2016
An International Scholarly Open Access Journal, Peer-Reviewed, Refereed Journal Impact Factor 9.15 Calculate by Google Scholar and Semantic Scholar | AI-Powered Research Tool, Multidisciplinary, Monthly, Multilanguage Journal Indexing in All Major Database & Metadata, Citation Generator
Publisher: IJSDR(IJ Publication) Janvi Wave
