People may not know what ESG is, but that isn’t keeping them from making financial decisions based on it. Awareness around the term is incredibly low: 85 percent of American respondents in a survey recently released by SEC Newgate , a global consultancy group, reported either having never heard the term, or not knowing that it refers to environmental, social and governance issue. And that level aligns with the global average. Despite knowing little about ESG principles at the start of the questionnaire, more than half of Americans surveyed — and 62 percent of respondents worldwide — said companies should be penalized for lack of action on key issues after reading a brief description of ESG. A majority also said they have taken some sort of action against a company in response to an ESG issue, like avoiding using a product or service or warning others to do so. And people want to know more: On a scale of 0 to 10, with 10 being extremely interested, American interest in ESG issues graded out at 6.2, with the global interest pegged at 6.5. Respondents in the survey of more than 12,000 participants across 12 countries, including 1,001 Americans, were critical of ESG performance despite their limited knowledge, giving no type of entity higher than a 6.4 rating: Nonprofits scored the highest, with small companies second; large companies and national governments scored lowest. And 40 percent of U.S. respondents said they’re willing to accept lower return on investment in companies with stronger ESG performance.
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