ESG – A New Paradigm for Business/
Date:9 March, 2022
The term sustainability is overused but at its core it is simply about recognising that we cannot have a thriving economy without a healthy planet and a more equitable society. In the context of COVID-19, the climate crisis and rising social inequality and populism, businesses are increasingly under pressure – from finance providers, governments and consumers – to show that they are playing their part in shaping a more sustainable future.
The pressures on business from finance providers is attributable to the increasing recognition that sustainability related risks and opportunities, which span Environmental, Social and Governance (ESG) issues, are financially material and can significantly influence profitability and long-term value. As a result, investors, banks and insurance providers are now evaluating companies through an ESG lens. They want to know that the companies they are investing in, lending to, or insuring, are managing ESG well. It is therefore essential that businesses understand the ESG issues that are relevant to them and can demonstrate clear strategies and policies to manage the risks and take advantage of the opportunities. Added to this there is a surge of new EU regulation around companies’ disclosure and reporting on ESG, intensifying the focus on the topic.