October 9, 2024 | 3 pm ET

This webinar provided an overview of an oft-ignored component of ESG: corporate financing of elected officials, the direct effects of that on their legislative behavior, and the resulting effects on the legal environment.

Such financing is mainly conducted with an eye on taxes and regulations. As a result, companies with otherwise good ESG scores may support officials and legislation opposed to environmental, social, and governance issues. Keeping track of this element of corporate influence in the world need not be partisan; legislators supporting sustainability and egalitarianism exist across party lines.

As the voting behavior of these officials is measurable, there is a force multiplier opportunity for intentional investors: just as they incentivize portfolio companies to be sustainable and diverse, they can also incentivize those firms’ portfolio politicians to be as well.

Anti-ESG and anti-sustainability pressure often comes from elected officials funded by companies that asset owners invest in, and therefore have influence with. The state of the regulatory and legal environment is a critical component of successful ESG investing at any time due to the immense power of government to support or oppose certain market behaviors. However, it is especially critical now, when these modes of investing have been thoroughly politicized and threatened by legislation.

IEN and Goods Unite Us, an IEN Member, explored how institutional investors can assess the political activity of the companies in their portfolio and use this data to craft actionable engagement strategies.

Recording