OECD Business and Finance Outlook 2020
Sustainable and Resilient Finance
The OECD Business and Finance Outlook is an annual publication that presents unique data and analysis on the trends, both positive and negative, that are shaping tomorrow’s world of business, finance and investment. The COVID-19 pandemic has highlighted an urgent need to consider resilience in finance, both in the financial system itself and in the role played by capital and investors in making economic and social systems more dynamic and able to withstand external shocks. Using analysis from a wide range of perspectives, this year’s edition focuses on the environmental, social and governance (ESG) factors that are rapidly becoming a part of mainstream finance. It evaluates current ESG practices, and identifies priorities and actions to better align investments with sustainable, long-term value – in particular, the need for more consistent, comparable and available data on ESG performance.
State-owned enterprises, sustainable finance and resilience
State-owned enterprises (SOEs) account for a growing share of the global corporate landscape, and the trend is likely to continue. SOEs’ commitment to sustainable development matters because of their sheer size, because they tend to be located in high-impact sectors and because SOEs enable the state to set the “tone at the top” in the business sector. This chapter analyses national approaches to environmental, social and governance concerns in the state-owned sector. Overall, SOEs’ commitment to sustainability is higher than among other firms but the trend is far from uniform, with some sectors and geographic regions clearly lagging behind. The chapter further highlights some challenges arising from increasing state ownership, including a large state involvement in sectors that continue to rely on fossil fuels, and a generally higher risk of corruption and other irregular practices in SOEs than in other firms.
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