ESG Amplified

The COVID-19 pandemic has amplified the investment materiality of environmental, social and governance (ESG) factors. In this publication, we outline why we believe companies managing ESG risks and opportunities are built on firmer foundations to brace and survive downturns.

In This Issue

Spotlight on Social

The focus today is on the corporate social response to the crisis—the ‘S’ in ESG. Effectively addressing the needs of employees, customers and suppliers can help companies build trust, bolster their brands and, one study suggests, may even lead to lower borrowing costs, higher credit ratings and lower stock price volatility.

Good Governance

Investors are starting to focus even more intently on good governance. How companies allocate capital and the policy choices governments make will help determine how well they respond to future economic shocks.

Green Light for Green Investments

The focus on climate change may decline in the near term as companies address financial challenges. But we think that will be a small bump in the road toward a decarbonized world. Once the pandemic is under control, green fiscal policies and private sector decisions could smoothen—or even shorten—the path to climate change commitments

GSAM Professionals Weigh In

“Having a social purpose is not a luxury: it is critical. The health crisis has sharpened the focus on this view, driving ESG risks to the top of the agenda in our client conversations, with particular focus on the corporate social response towards employees, customers, suppliers, and society.”

Sheila Patel | GSAM Chairman, with oversight of ESG and impact investment initiatives

“ESG factors are material business issues and focus on the ‘what’ and the ‘how’ of corporate activity. The COVID-19 pandemic has led to greater attention on these factors, as an important input to our assessment of enterprise strength in an ever-evolving business environment.”

Hugh Lawson | Head of Institutional Client Strategy and ESG & Impact Strategy; Co-Chair, GSAM Sustainability Council

"A stark aspect of the health crisis is its disproportionate impact on lower income segments of populations, who can be both more exposed to the virus and less equipped to withstand economic difficulties. We believe the pandemic has made companies more conscious of their social responsibilities, a shift that could have lasting positive impacts."

Kathryn Koch | Co-Head of Fundamental Equity; Co-Chair, GSAM Sustainability Council