ESG risks and responsible investment in financial markets

Increasingly, the world is facing environmental, social and governance (ESG) challenges. Global warming is a more and more urgent issue. Social issues such as labour conditions in apparel supply chains receive significant media attention and spur people to think about their consumption. Meanwhile, governance issues, such as management remuneration, are now receiving attention; in Switzerland, for example, a civil vote has been held on this issue. These ESG issues are not just some undefined phenomena, however: they are actual risks to the economy. The work looks at ESG risks and Responsible Investment (RI) in financial markets. The focus lies on the materiality of ESG risks and on the way investors, especially institutional investors, consider ESG risks. Also, regulatory approaches regarding ESG risks and RI in the EU are examined. As recent publications such as the “EU Anti-Corruption Report” from the EU have revealed, market players think more and more about ESG risks. This work with the common theme of the status quo of ESG risks in financial markets today supports this trend and helps to raise awareness of and interest in the financial and economic relevance of ESG risks and RI.