Barclays research has identified 10 key ESG themes for 2022 which includes seeing companies, sovereigns and investors moving into the implementation phase of net zero.

The 10 themes are:

ESG regulation accelerates globally amid challenges
Regulators are expected to advance and refine their ESG efforts in 2022.

ESG improvement vs. divesting challenged sectors
Investments in ESG-challenged sectors are too often divested when instead an approach of engagement to enact positive change could result in more real-world change.

Investors put net zero commitments into practice 
Investors will likely expect companies to make clear and transparent disclosures explaining their goals and demonstrate clear climate strategies to achieve net zero targets.

Investors clamour for forward looking data
A heightened focus on forward-looking data to better understand the future ESG trajectory of companies. Examples of data sets include temperature alignment scores, planned green capex expenditures and the use of natural language processing to assess the credibility of corporate commitments.

Impact of investor engagement comes into focus
Asset managers working to report on engagement outcomes quantitatively rather than only providing case studies in their ESG and Stewardship reports. The sustainability-linked bond market is a prime candidate for better dialogue between investors and issuers.

Greenwashing accusations to hit investors 
Complex regulation and difficulty in integrating ESG strategies will create room for interpretation. This could draw greenwashing claims to be directed at institutional investors in 2022, not just issuers.

ESG in macro goes mainstream
How will ESG agendas impact inflation, GDP, trade, central bank mandates and other
macroeconomic issues? How will climate change and transition policies affect interest rates?

Progress towards carbon pricing
More than 2,000 companies representing $27 trillion in market capitalisation are using or planning to use internal carbon pricing within the next two years. This includes 57% of the world’s largest corporations.

Carbon offsets rise in importance but come under greater scrutiny $1.5 trillion
Net zero commitments will result in surging demand for carbon offsets. Expect more scrutiny on how businesses plan to use them.

Targeting deforestation and measuring biodiversity
In 2022, investors should pay close attention to the EU’s work on minimising deforestation risks linked to products sold in EU markets. Third-party certification and satellite technology will increasingly provide independent verification of sustainable production practices.