From niche to mainstream: Sustainability factors exert a growing influence on investments

Enbridge named to Global 100 list for ninth straight year, ranking No. 12 overall

When you manage more than $6 trillion in other people’s money, you learn to ask the tough questions.

Investor interest in social and environmental issues is hardly a new development. But formal and systematic integration of environmental, social and governance (ESG) factors into investment and asset allocation is becoming a mainstream practice—among banks, among pension and sovereign wealth funds, among insurance companies.

Not to mention global investment management giants like BlackRock, Inc., as founder and chairman Larry Fink recently noted in his 2018 letter to CEOs.

“A company’s ability to manage environmental, social and governance (ESG) matters demonstrates the leadership and good governance that is so essential to sustainable growth—which is why we are increasingly integrating these issues into our investment process,” Fink writes.

ESG refers to a set of criteria, used by investors or lenders, to evaluate corporate performance on the non-financial matters that have the potential to affect a company’s long-term sustainability.

It’s a rapidly growing area. According to industry estimates, about US$22.9 trillion worth of assets is now being professionally managed under responsible investment strategies worldwide, up 25 percent since 2014.

Simply put, responsible investing has moved from niche to mainstream, and Enbridge, like other companies, is working to further anticipate the ESG needs of those investors.

Through our annual CSR/Sustainability Reports dating back to 2001, our yearly Safety Report to the Community, and our inclusion on global lists such as the Carbon Disclosure Project (CDP), Enbridge shares how we’re performing in these areas, and acting on our commitment to strengthen the social fabric, and protect the environment, in the communities where we operate.

And today, for the ninth straight year, Enbridge was named to the Global 100 Most Sustainable Corporations list—a well-established ranking that evaluates corporate performance on key social and environmental issues.

The announcement was made during the World Economic Forum in Davos, Switzerland, with Enbridge placing No. 12 overall—our best result in this annual ranking, and a considerable bump from our No. 39 spot in 2017. Enbridge is tops among four Canadian companies named to the 2018 list, and the only Canadian energy-sector company to make the grade.

Toronto-based Corporate Knights, which manages the Global 100, used 15 key performance indicators to analyze thousands of companies against their global industry peers—and eventually determine the top 100.

Ranking criteria used by Corporate Knights include:

  • Energy, carbon, water and waste intensity;
  • Workplace safety performance;
  • Employee compensation, turnover and pension plans;
  • Capacity for innovation; and
  • Clean revenue.

“The Global 100 companies are built to last, demonstrating that firms which adapt to serve societal needs also do well financially,” says Corporate Knights CEO Toby Heaps.