16th or higher
The study found that companies with high ESG scores experienced lower costs of capital, lower equity costs, and lower debt costs compared to companies with poor ESG scores.
A New Paradigm: ESG-Environmental, Social, and Governance
According to the US SIF Foundation's 2020 Report on US Sustainable and Impact Investing Trends, as of year-end 2019, one out of every three dollars under professional management in the United States-$17.1 trillion-was managed in accordance with sustainability metrics.
They cite more than 2,000 academic studies that concluded better ESG scores translate to about a 10% lower cost of capital.
In response to this growing trend, most companies have developed policies on Environmental, Social, and Corporate Governance (ESG).
ESG policies discourage businesses from relying solely on financial metrics and encourage broader environmental metrics in their decision-making.
governance, environmental, social, ESG, Energy Sector
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