• Finance and Microfinance

New FGV center analyzes social, environmental and governance impacts of investments

16.09.2020

The idea is to identify and implement best practices in these three areas: environmental, social and governance (ESG).

The Finance Research Center (FGVcef) at Fundação Getulio Vargas’ Sao Paulo School of Business Administration (FGV EAESP) is launching ESG Investing, a new center for researchers with diverse profiles, aimed at getting a better understanding of the impact of environmental, social and governance (ESG) factors on investment.

The idea is to identify and implement best practices in these three areas. “Investors around the world are increasingly evaluating their investments in line with these non-financial factors as well. The purpose is to support practices that improve society as a whole,” says Claudia Yoshinaga, one of the two coordinators of FGVcef and ESG Investing.

Institutional investors are concerned about climate change and exposure to carbon risks, but there is no generally accepted way of measuring the ESG performance of companies around the world or the impact of ESG performance on investment returns. In this context, does investing in companies that are concerned about ESG generate higher returns or are investors consciously contributing to improvements in society?

“To help clarify the subject of ESG, we are already conducting research in the following areas: the macroeconomic impacts of ESG, especially in developing countries; how to measure companies’ commitment to ESG; the development of a public rating system; and ESG’s impacts on investments,” says William Eid Junior, the other coordinator of FGVcef and ESG Investing.

ESG Investing is coordinated by Claudia Yoshinaga and William Eid Junior. Its researchers are Alcindo Canto Neto, Luis Bonacina, Victor Henriques de Oliveira, Julia Rezende, Samy Mesnik and Rodrigo Michel.