While environmental, social and governance investment considerations have grown around the globe, the U.S. municipal securities market is just beginning to delve into the space in varying degrees.
![](https://arizent.brightspotcdn.com/dims4/default/39feedb/2147483647/strip/true/crop/1920x1080+1+0/resize/800x450!/quality/90/?url=https%3A%2F%2Fsource-media-brightspot.s3.us-east-1.amazonaws.com%2F0f%2Fb3%2Fbdabc2234f2ea3f765c6a6b6bcd6%2Fesg-editorial-research-report-1920x1080.png)
Market participants from the world's largest asset managers to ratings agencies to technology and data providers to state and local government issuers themselves are focusing on ESG — climate change, social justice and green bonds. .
But incorporating ESG into the municipal industry is complex and the opinions on how to or even whether to take part vary to a large degree depending on the vantage point from where that participant sits. How various participants navigate ESG in the municipal industry is made more difficult by the $4 trillion, 55,000-issuer, geographically and culturally diverse marketplace itself.
Key findings:
- More than half of respondents, 56%, rate ESG as important to the municipal industry with the greatest importance placed on the environmental aspect at 73%, followed by governance at 60% and social at 50%. Issuers place greater value on governance.
- Two-thirds of respondents, 66%, see ESG as an accelerant for municipal industry growth and 56% see it as a catalyst for foreign investor interest in the space.
- While just 42% say it is important for rating agencies to take ESG into consideration for ratings, two-thirds say it is very important or critical for issuers to disclose ESG risks and opportunities in their disclosures.
- A large majority, 77% of respondents, believe there should be a universal “language” for ESG in the municipal space.