“Companies’ ESG scores improve countries’ macroeconomic growth, report finds” – GreenBiz – June 9, 2020

On June 9, 2020 GreenBiz covered a new research report by the University of Oxford that examines the relationship between private sector corporate ESG performance and macroeconomic growth.

“Private sector companies’ environmental, social and governance (ESG) performance can improve countries’ economic growth, according to landmark research published last week that contains major implications for policymakers and central banks plotting how to best resuscitate coronavirus-stricken economies.

The breakthrough report, published by the University of Oxford, reveals for the first time a significant positive correlation between average ESG scores at companies and their native countries’ macroeconomic performance, with high ESG performance aligning with an improvement in GDP per capita and a reduction in unemployment.

The study, which co-author Ben Caldecott described as “an exploration of the relationship between the micro economy ­— the companies that constitute an economy, or the large part of the economy — and the macroeconomic picture,” concludes that promoting good ESG practices in the private sector is an important way that policymakers can accelerate economic growth and development.

The researchers looked at ESG scores of thousands of firms across 19 developed economies and 11 emerging economies over a 15-year period through to 2017 to provide their evidence base. The analysis found that increases in average social performance had a positive effect on economic growth across all countries surveyed. Meanwhile, an improvement in corporate environmental and governance performance had a positive effect in emerging economies.”

You may read the article on the GreenBiz internet site.