ESG risk mitigation and compliance boosts company value

Transactions involving environmental, social and governance (ESG) investments are now the fastest-growing segment of the financial services industry.

By 2024, ESG global assets under management are estimated to be between $40 trillion and $60 trillion.¹

Beyond investor demand, regulators' actions worldwide display an increased focus on ESG programs. Creating ESG programs to meet the demands of investors and regulators unquestionably will have costs attached, but we recommend that companies view these costs as opportunities to generate value for their business and its stakeholders, rather than solely as compliance expenses.

Further, we believe that companies' compliance organizations should play a leading role in the rollout of ESG programs. Rather than merely regulating costs, compliance organizations can leverage ESG initiatives to streamline processes, enhance brand value, increase asset valuation and improve employee retention.

Continue reading to learn about how business leaders can boost their company value through ESG from AlixPartners experts Brooke Hopkins and David Bligh in an article co-authored with Evan Singer, partner at Jones Day, and Kelsey Smith, Associate at Jones Day, for Law360.

1. C. De Coninck-Lopez, Y. Gamal El-Din, M. Cranny, The Future of The ESG Craze, NASDAQ (Jan. 19, 2022) https://www.nasdaq.com/videos/the-future-of-the-esg-craze

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