Key Takeaways: ESG 101: Information for the Forest and Wood Products Sector

ESG for investors:
“ESG” stands for environmental, social, and governance factors. ESG investing supports companies committed to one or more ESG factors. Also called sustainable investing, socially responsible investing, and impact investing.

International collaboration:
As of December 2022, there are 5,319 signatories to the United Nations’ Principles for Responsible Investment (PRI) representing US $121 trillion (five times the annual US GDP).

Financial Security:
A review completed by NASDAQ found that over a five-year period, companies that are ESG LEADERS exhibited both higher returns and less risk.

Financial Impact:
An analysis of more than 2,000 academic studies concluded that 70% reported a POSITIVE CORRELATION between ESG and financial returns.

Legislative Action:
Anti-ESG or “boycott bills” have been proposed in 16 US states and five have enacted investment restrictions.

Corporate Reporting:
96% of the S&P 500 are producing sustainability and climate change related reports.

ESG Developments:
The forest and wood products sector is active in ESG, companies are being recognized for their leadership, and sector-wide strategies should be considered as ESG moves into more consistent regulatory framework.

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