Herculano, whose background is in private equity renewable energy, says the issue continues to be about tangible metrics: "We've spoken to providers and there is no consensus in how to rate companies according to E, S and G metrics, and no consensus on how to put all of the numbers together. Funds are being put in place and billions are being raised to represent companies that have very high ESG scores. But what is the common denominator? What is the purpose? What is the impact?"

Herculano believes that impact will remain muted while decarbonisation is a cost line item for companies. "Companies are going for the low-hanging fruit to reduce their Scope 2 emissions and doing just enough to stay within the Paris Agreement and be lumped into these groups of ETF companies doing 'less harm,'" when the focus should be on emissions avoidance, she said.

A thirst for education and understanding ESG is arguably replacing the marketing rhetoric that has dominated the industry over the last couple of years.

Candriam’s new training model is the 4th ESG course in 11 modules at the academy, which serves around 8,000 members in 40 countries. The module aims to guide investors through five steps to understanding a company’s ESG risk profile. Steps include examining a company’s revenues and spending to understand its main activity and future direction; looking at how these activities align with sustainability objectives; questioning whether the company’s operational conduct presents any scope for future controversies; continuing ongoing company analysis as the best warning system; and being able to meaningfully compare ESG data across different company functions, including corporate engagement.

“Whilst financial information has been subject to mandatory disclosure in a number of markets for some time, the scope of information available to investors for ESG analysis can vary significantly from one company to another. We therefore felt it was important to leverage our own experience in responsible investment to guide investors on the key steps that are required in their own ESG analysis within investment decision making,” Candriam's head of ESG development, David Czupryna, said.