Social and governance issues are equally or even more important than the environmental factor in driving the ESG investment decisions of US consumers.
These findings are from a study by Allianz Life Insurance Company of North America, which surveyed 1,000 respondents aged 18 years or older.
Of those surveyed, 73% considered social issues like employee working conditions and racial/gender equality while investing.
Besides, 69% of the respondents weighed governance issues including business transparency and level of executive compensation.
Environmental concerns including natural resource conservation or a company’s impact on climate change were found to guide the decisions of 73% of the investors.
When asked about the significant factor driving their desire to do business with a company, 34% of the respondents cited a company’s stance on social issues.
Twenty seven percent of the respondents emphasised corporate governance issues in this regard, while 22% focussed on a company’s record on environmental issues.
Also, 71% of the respondents said they would stop investing in a firm that was unethical.
Allianz Investment Management CIO Todd Hedtke said: “While environmental factors are certainly important, the average investor in the U.S. is just as interested in a company’s social and governance practices before they make investment decisions.
“From a business perspective, companies need to pay attention to the fact that ESG is not some passing fad.
“Companies that view this as an opportunity to make changes are likely to realise a positive impact in both the near- and long-term.”