The S in ESG: Carlo Funk (SSGA)

August 14, 2023

S van ESG ESG

Carlo Funk (foto archief SSGA) 980x600.jpg

^{This article was written in Dutch. This article is an English translation.}

By Carlo Funk, Global Head of ESG Strategy en EMEA Head of ESG at State Street Global Advisors

How do you interpret the S of ESG?

'The social pillar of ESG offers a broad definition that encompasses diversity and inclusion, elements of human and labor rights, but also specific areas such as product safety, sales practices and employee well-being.

Measuring and quantifying risks and opportunities for companies is crucial in investment decisions, but can still be challenging, especially in the absence of an internationally agreed accounting standard on ESG.

We continue to focus on materiality by collecting a large number of data points and mapping them as material social factors in line with the definitions of the Sustainability Accounting Standards Board (SASB), which are now being incorporated into the International Sustainability Standards Board (ISSB) ).'

How does the S relate to the E and G within the investment portfolio?

'The S-pillar is becoming increasingly important and relevant for sustainable investing as more investors seek numerical substantiation of the impact of ESG policies on a company's strategy and performance.

We address the social pillar through our investment strategy and through effective engagement. Particularly in the area of stewardship, we can promote sound social policies to improve long-term value creation.'