How companies can implement an ESG strategy

In an interview with Yahoo Finance's Seana Smith, Northern Trust Wealth Mgt. CIO, Kate Nixon and Nasdaq CFO Ann Dennison discuss how companies can increase their number of sustainable investments.

Video transcript

SEANA SMITH: So Katie, there certainly is more of an interest in ESG. Yet we're still seeing this gap between investors showing interest and then, of course, those taking action. Why do you think this is, and what do you think is needed in order to close that gap?

KATIE NIXON: So I think Anne actually hit on some of the key issues here. And one of them is measurement. You know, we're still-- she used the word journey. I love that word. Because we're still on a journey here and figuring out how to collect consistent data, how to measure success. And I think investing is a quantitative business. So without having those quantitative anchors, it can be really difficult, I think, for many investors to make that leap of faith into a full ESG solution.

So that's been an impediment, sort of the lack of consistent definition, the lack of consistent data, the lack of being able to really measure success. But we're really seeing that evolve over time and improve over time. And so, I do think that that, as an impediment, will lessen and lessen over time. And then it comes down to really deciding how investors want to implement an ESG strategy. And they can do everything from a passive strategy to full-on integration to SRI and impact investing.

So it's a more complicated conversation that requires a little bit more sort of self-discovery than a typical investment conversation has. And, you know, that just takes time. So we do think with the improvement of data and the evolution of time, we'll see many more sort of words turn into action on the ESG front. And we're already seeing that today, Seana. We're seeing a lot of investors really want to put their money where their mouth is on the public equity side, on the private equity side, really develop strong family mission statements, family value statements, to really intentionally align their investments with their family values.