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As the world reacts in shock and fear to the risk of acoronavirus pandemic, ESGinvestors attend to the underlying, end-all,be-all risk — climate change.  And three importantfindings from a recent survey of institutional ESG investorsdeserve calling out: The first is that ESG investing is increasing and has "risensignificantly." The second is that more and more institutionalinvestors are engaging in it.

And the third is that ESG performance needs to be moreaccurately communicated, not just by adhering to one of severalaccepted standards for communicating that performance, but also bythe behavior of management and the company board, which investorssee as an indication of whether a company walks its talk.

That's according to Morrow Sodali's 5th Annual Institutional Investor Survey fromJanuary 2020 of 41 global institutional investors, managing acombined USD $26 trillion in assets under management.

"2019 marked a turning point in incorporating ESG factors intomainstream investing as investors recognize the growing risks ofnon-financial factors," the survey notes. The main growing risk,not surprisingly, was climate change — the driving interest of ESGinvestors.

As many government and business organizations have warned(including such diverse pairs as the Federal Reserve and the U.S. Dept. of Defense), climate change posesbusiness, economic, societal, and national security risks.

That doesn't mean ESG investors cared only about monitoringenergy, oil, and industrial companies. ESG investing goes farbeyond that, as investors are questioning and monitoringenvironmental policies and processes of all companies, "[a]lthough… different companies will be affected by climate change indifferent ways," the survey acknowledges.

Greenwashing, a practice in which companies falsely portraytheir products, processes, and policies as being environmentallyfriendly, is a no-go for ESG investors."Overwhelmingly 91% ofrespondents expect companies to demonstrate a link betweenfinancial risks, opportunities and outcomes with climate-relateddisclosures," the survey notes.

And yet, the survey authors say, "there remains plenty of workto be done for companies on how best to report and manageenvironmental and social issues."

Several standards exist for companies to use to show ESGperformance. Investors in the survey recommended two standards byoverwhelming numbers as the best to use to communicate company ESGinformation: SASB (81%) and TCFD (77%).

But the bottom line, the survey authors conclude, is "Investorsare sending a very clear message that it is not what a company sayson paper, but rather how its top representatives communicate theirpurpose and culture that sets the 'tone at the top' and filtersthrough all levels of the organization."

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