Esg Is A Revolution, Not A Bubble

By Author: Directors Institute
Total Articles: 7
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ESG has become the cynosure of the corporate world’s eyes and this kind of attention is definitely not without a reason. Some may like the ESG trend, and some may dislike it, but certainly, nobody can ignore it. Many argue that it is just a fad and does not carry any substantial value. On the contrary, many believe in the revolutionary nature of the buzzword. So, is ESG really a revolution or simply a bubble?
We are of the opinion that disregarding ESG is as good as disregarding climate change. Can anyone deny that our planet is in a perilous state? I think Covid-19 has given us all the bandwidth to evaluate our actions and think about the reasons as to why is there an upsurge in heat waves, untimely weather conditions, droughts, floods and visible climatic disasters. 194 countries wouldn’t have signed up for Paris Agreement if they thought climate change was a bubble. Governments all over the world are enacting and implementing regulations to solve these alarming issues. A number of ESG reporting frameworks have been created to enable companies to pursue ESG assessment and ESG reporting.
Apart from governments, ...
... people have become increasingly aware of the social responsibilities that a company holds and its implications on employees if social wellness is not maintained within an organisation. Employee performance is directly proportional to the company’s performance and if employees are not in the right state, the company is bound to suffer. The names of companies like Enron, Satyam, Polly Peck and many others wouldn’t have been erased from good books if their corporate governance was strong enough. Also, on the environmental facet, it is not like one who emits GHGs suffers proportionately. If it had been so, majorly companies would have been at the receiving end of climate disasters. But that’s not the case. Every individual is bearing the consequences of temperature rise caused by emissions at the hands of corporations. There is a saying in the legal world that, not only one who commits the crime is responsible but the one who helps in the commission of a crime is also equally responsible. Given the devastating effects of climate change on the planet and people, it will not be wrong to judge that actions against the environment and investors’ faith are no less than a crime. This is the reason why investors today are choosing the path of Responsible Investing and ESG funds have become so popular.
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