In the wake of the COVID-19 pandemic and the social justice movement, investors are paying much more attention to the social element of ESG -- specifically, how companies treat their employees, respond to political issues, and philanthropic efforts.
A recent nationwide survey by Crossmark Global Investments revealed how investors view a company’s actions when making investment decisions.
Treatment of Employees
More than half of investors surveyed (56%) said they are paying more attention to how companies treat their employees this year. 59% of investors say their decision to invest in a company would be impacted if that company made significant layoffs due to the pandemic, but the management team did not take pay cuts.
Response to Political Issues
A company's response to political issues affects investors' decision to invest in, purchase product or service from, or work for a company.
Philanthropic Efforts Also a Factor
In addition to paying attention to how a company treats its employees, younger investors (18-34) are more inclined to pay attention to a company’s philanthropic efforts prior to investing in that company. More than 60% of Millennials (ages 18 - 34) said a company's philanthropic efforts impact their decision to invest in the company compared to 43% of investors aged 55 and up. In terms of purchasing products or services from a company, 62% of millennials said the philanthropic efforts of a company have an impact on their decision making.