Measuring the success and opportunities of ESG initiatives

Yahoo Finance's Seana Smith has a wide-ranging conversation with Northern Trust Wealth Mgt. CIO, Kate Nixon and Nasdaq CFO Ann Dennison on how investors are navigating the ESG landscape.

Video transcript

SEANA SMITH: Is how would you or how do you plan to measure that success?

ANN DENNISON: So for sure, we're thinking about this all the time. And how we're going to measure that is-- First step is disclosure, making sure that the data underpinning our disclosure is accurate and we have strong support for it. But then as we look forward, thinking about where do we want to go, and measuring ourselves along the way.

So one good example of this is going to be around environmental disclosures. So we, starting this year-- We've been three years carbon neutral, but starting this year, we committed to NASDAQ to disclosing science-based targets. That's a journey.

And so we're working to put in an environmental management system and thinking about how to validate all of the data that we have so far. And so success will be validating that data, getting to our disclosures, and feeling really good about what we're putting out there that investors can rely on it.

SEANA SMITH: And Kate, going back to something that you said a few minutes ago, you brought up the fact that ESG is an opportunity in order to build the bridge between generations. And I'm curious to get your perspective from the conversations that you've been having with your clients. How do the goals or how do the interests differ based on generations when it comes to ESG investing?

KATE NIXON: It's so interesting because I think the perception is that ESG is sort of a millennial thing or a younger person's thing, and we've actually seen a lot of interest in ESG across our generation one and generation two investors. So it's not just a Gen Z or a millennial thing.

The way that they're thinking about it though, might be a little bit different. And I do think what we're seeing in the G1 and G2 areas is an interest, not only in ESG as a values-based investment strategy, but as an opportunistic strategy as many of these investors sort of want to lean in to where the puck is going.

Green energy, for example, they want to have investments in their portfolio that will take advantage of those opportunities. It's sort of that double bottom line kind of concept with the G1 and the G2. And then clearly, we have the younger generation that really want to make sure, first and foremost, that they do no harm. So that's what I hear mostly from our families, is that the younger members of the family want to make sure that the investments they're making are not investments that are bad from an ESG perspective.

And then you have everything sort of in between those two also between the generations. So I think it's hard to draw too many black and white conclusions about where ESG fits in across the different generations of families because I think it's changed and evolving. Over time, a lot of the reason that it is is some of the things that Ann is talking about. Companies are evolving just as investors are evolving. So companies are taking a real front seat here and driving some of these initiatives and bringing them to investors' attention, which again, I think just keeps the ball rolling.