In recent years, the growth of investor interest in sustainable investing has been remarkable. As that interest has grown, the response of corporations has evolved. Early on, companies usually allocated resources towards projects with positive impact for employees, local communities, and other stakeholders. More recently, corporate strategies have become more sophisticated, integrating environmental, social and governance factors at the core of the organisation to guide both strategic and operating decisions.
Studies have shown that such moves by companies often enhanced financial performance through cost savings, increased brand value, innovation, employee productivity, and lower cost of financing. Other research has documented that sustainability disclosure by companies is helping drive stock performance, as investors use that information to sharpen valuations relative to industry peers.