ESG initiatives: A shot in the arm for the long-term values

13 August 2021 Consultancy-me.com 2 min. read
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Abhishek Jajoo, the Founder and Chief Executive Officer of UAE-headquartered boutique consultancy AJMS Global, explains why the compliance function – as well as the boardroom – needs to take sustainability objectives seriously. 

The demand for transparency on sustainable and socially responsible practices is on the rise. Stakeholders are calling for transparent disclosure of information concerning the ESG – environment, social, governance – issues within and related to business management.

Companies across every industry are increasingly being made accountable by their various stakeholders such as investors, customers, employees, regulators, and non-governmental organizations that want to evaluate that company’s impact on society, ecology and the climate. 

Are ESG initiatives a shot in the arm for the long-term values?

Sustainability reporting is the key platform for communicating sustainability performance and impacts. Sustainability reporting enables organizations to be more transparent about risks and opportunities they face. With recent developments, regulators are making it mandatory for a certain set of companies to prepare sustainability reports with plans on increasing the purview of ESG compliance to other companies as well. 

However, sustainability reporting involves more than just disclosing non-financial environmental, social, and governance consequences. Companies with superior ESG performance have shown higher investment returns, lower risks, lower cost of raising capital and greater crisis resiliency. 

Having a robust ESG compliance function at the heart of an organization brings into the limelight those aspects that carve an image of a reliable business concern.

It is high time that we pay attention to the ever-increasing valency of ESG compliance across the globe and embraces the eventual benefits it offers.