The FRC has commissioned a review to investigate how ESG ratings agencies and proxy advisers affect investment decisions.

Researchers say firms may exaggerate their ESG performance over fears that investors will divest from their stock.

Stewardship starts with the character of the company, and at its core is the idea that a business is conducted to meet human and social needs.

The pandemic has underlined the importance of sustainable investing to global progress on ESG and stakeholder governance.

This year has seen 111 mega deals, up on last year’s 97, despite the ongoing Covid-19 pandemic and uncertainty over Brexit.

Researchers found that firms’ ESG ratings were also “significantly negatively associated with returns” in the Q2 recovery period.

Asset manager says separated roles provide “a better balance of authority and responsibility”, which aligns with the long-term interests of investors.

An investigation by the bank, which invests Norway’s oil revenues, revealed G4S had “behaved in a manner which is at the limit of, or outside, accepted norms” with regard to its treatment of migrant workers in Qatar and UAE.

The proxy advisory firm has asked that new regulatory demands be set aside, claiming the watchdog “lacks authority” and its actions are “contrary to law”.

Statistical analysis of the impact of active institutional investors shows that firms respond to changes in investment strategy by enhancing corporate governance.