- ESG measures are increasingly considered a business priority for companies.
- Having a strong ESG focus allows companies to build their brand to attract investors.
- Some ESG priorities that a boardroom should consider discussing this year includes stakeholders and business purpose, sustainability, inclusion, diversity etc.
Several companies have increasingly turned their focus towards environmental, social, and governance (ESG) issues in recent years.
A strong ESG alignment has gained importance for companies as it helps in the brand building helps the business in attracting potential customers as well as investors. ESG focused investing has risen in popularity due to increasing pressure from activist investors as well.
A January 2022 report by the Institute of Directors identified a checklist of several ESG related priorities issues that a company’s boardroom ought to discuss in 2022. Some of these issues include stakeholders and business purpose, sustainability, inclusion and diversity, governance as well as executive remuneration.
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Given this background, let us, deep-dive, into 2 FTSE 100 index listed stocks involved in the ESG space and explore their investment prospects:
- Aviva PLC (LON: AV)
Aviva is a life insurance major.
The company’s investment arm, Aviva Investors, said they hope for tangible and transparent progress over its expanded sustainability definition in 2022 from the companies it invests.
Aviva Investors CEO Mark Versey stated in its annual letter that the company will now target biodiversity preservation and the upholding of human rights in addition to the existing goals of executive pay and climate.
The letter will be delivered to 1,500 firms, which are part of Aviva Investors’ portfolio, located across 30 nations.
Aviva holds a 16.8 ESG rating and is called low risk, according to data from ESG analytics firm Sustainalytics. It is ranked at 26 out of 302 companies in the insurance industry group as of 6 October 2021.
Aviva’s market cap was at £16,255.79, and it had given shareholders a return of 22.12 per cent on a one-year basis, as of 24 January 2022.
- Unilever PLC (LON: ULVR)
Unilever is a UK-based consumer goods major. In January, the company made an acquisition offer for GSK Consumer Healthcare. On 19 January, Unilever added it does not intend to offer more than £50 billion for the acquisition based on its view on the GSK’s consumer healthcare business’ fundamental value. Unilever is set to report its Q4 and FY 2021 results next month on 10 February.
The company holds a 21.6 ESG rating and is in the medium-risk category, according to data from ESG analytics firm Sustainalytics. It is ranked at 8 out of 104 companies in the household products industry group as of 5 October 2021.
The company has a market cap of £94,115.52 million as of 24 January 2022.