Deloitte: Environmental, Social, Governance Performance Affects Organization’s Market Value
According to a new Deloitte report, an organization's environmental, social and governance (ESG) performance can directly and indirectly impact its market valuation. The report highlights that short-term ESG issues and events, including human rights issues, product recalls, boycotts and protests often trigger the strongest and most immediate impact on stock prices. However, there is less convincing evidence that ESG performance leads to higher stock returns over the long-term. Deloitte's report highlights how and why ESG performance is expected to continue to be a consideration in financial valuation and several reasons risks may play an increasingly important role on performance.