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research report

Globe editors have posted this research report with permission of Canaccord Genuity. This should not be construed as an endorsement of the report’s recommendations. For more on The Globe’s disclaimers please read here. The following is excerpted from the report:

The last five months have been unprecedented within the global capital markets with historic volatility, a laser focus on the “COVID-19 economy” and myriad projections on how the world will look coming out of the pandemic. Many companies have been forced to rapidly adapt their business models to adjust to changing demand environments and new physical-distancing requirements, and these changes have become the focus for many investors over the last few months. That said, prior to the COVID-19 pandemic, one of the most powerful trends within both Canadian and global capital markets was an increased focus on Environmental, Social, and Governance (ESG) practices. We believe this trend is poised to accelerate.

Numerous studies have demonstrated how firms that score highly on an ESG framework tend to provide stronger shareholder returns over the long term. This, in our view, is reflective of the long-term view employed by many leaders in the ESG space, and the ability of these leaders to identify both longer-term potential risks and opportunities for growth and efficiencies. The COVID-19 pandemic has provided a concrete example of why companies and investors have become more focused on longer-term risk mitigation and on a company’s ability to pivot its growth strategy based on a rapidly changing environment.

Leaders within the ESG space today have exhibited a shift from “reactive” to “proactive” ESG strategy implementation, and we expect the adoption of more formalized ESG practices to accelerate over the next decade.

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