This OECD paper provides a stocktake of investor practices and adoption of Environmental, Social, and Governance (ESG) in their investment processes. It concludes that regulatory frameworks for investment governance which are built on risk-based controls and prudential standards do not usually refer explicitly to ESG issues. Regulatory frameworks for the most part do not prevent ESG integration, and other legislation or voluntary codes may encourage institutional investors to take ESG factors into account in their investment governance. However, investors lack clarity as to how ESG integrates with other obligations.
Publication Date: 2017