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Study Explores Links Between a Company’s ESG Focus and its Financial Performance
May 23, 2023A recent study by Bain & Company and sustainability ratings provider EcoVadis “examined how various aspects of sustainability and ESG activities—things like setting ESG targets, tracking results, embedding sustainability into management processes, procuring sustainably, and putting in place programs to reduce carbon and improve diversity, equity, and inclusion— correlate with both ESG outcomes and financial performance.” The study concludes that, for the companies surveyed, 80% of which were private, “ESG activities have no strong negative correlations with financial outcomes; in fact, they are associated with encouraging revenue growth and EBITDA margins.” The Study was geared to the private equity industry, with the authors observing that “investment policies of 70% of the limited partners surveyed by Bain & Company and the Institutional Limited Partners Association in 2021 included an ESG approach.”
