Industry leaders, investors, regulators, rating agencies, and governmental entities are all watching a strong trend that will likely become a competitive factor in government contracting in the future. The significance of the trend’s impact cannot yet be calculated, but it could be substantial.
Environmental, Social, and Governance (ESG) has been a topic of discussion at the corporate level of many large firms for a number of years. Investment groups also are discussing the various components of ESG, and many are seeking investment opportunities for projects that have high ESG metrics. Although no standardized way exists to measure ESG, companies that can point to initiatives and/or policies related to ESG often tout this in annual reports. Morningstar, Bloomberg, and MSCI use their own metrics to report on ESG ratings.