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2022 ESG Trends to Watch
Ten emerging trends for companies and investors
When we first published our annual ESG trends to watch a decade ago, climate change, the value of human and natural capital, and conflicting demands for water all made the list. The risks of a changing climate, health and safety, and our dependence on nature echoed in one form or another in each of the annual forecasts that followed.
While looking out a year won’t tell you what comes next, the act of considering annually what lies ahead shows that if you have a long enough horizon, the ESG risks of today can end up changing the risk profile for investors tomorrow.
Each of these trends is shaping society. Together they hint at the risks and opportunities that may exert a pull on investment portfolios, and the forces that investors may be confronting, in the years and decades to come.
Over the last decade, ESG has gone from fringe to mainstream. Investors and companies have seen increased regulation, demands for transparency and a quest for standards.
Here are some of the ESG trends we see impacting investors and companies in the coming year. They range from evolving regulation and the receding of greenwashing, to the intensifying push for change in how the planet produces energy and the critical role of natural capital. Others look at lessons learned (or not) from the pandemic, and the latest twists in the enduring challenge of global inequality.
Climate is eclipsing governance and social issues at the top of the ESG agenda, reflecting both the existential threat of global temperature rise and the race against time to rein it in.
ESG investing has become a prevailing part of investing. The year ahead will reflect it.
What looming issues of today might become the systemic risks of tomorrow?