Did you know? The value of ESG assets may surpass $50 trillion by 2025 - around one-third of the projected total assets under management globally. There’s no debating that ESG is a hot topic in today’s world, but what’s all the buzz about?

ESG is a type of framework used to evaluate the sustainability and societal impact of an organisation or project, and takes into account three key non-financial factors; environmental, social, and governance. We like to think of it as a way of asking “How good is this project for the planet and people?” Whilst different industries, sectors, and regions may have their own sets of priorities and standards when it comes to ESG, these are some of the most relevant areas under each three heads that people often look out for:

*          Environmental* (ie. How you impact the environment and manage those risks)

Air and water quality, biodiversity and ecosystem preservation, energy use and efficiency, GHG emissions, resource consumption and recycling, waste management

          Social (ie. How you interact with your stakeholders)

Supply chain responsibility, health and safety, human rights, labour practices, diversity and inclusion, community engagement, healthcare and education, political engagement, responsible innovation

          Governance (ie. How you manage and operate)

Overall structure and decision-making processes, transparency and accountability, executive compensation, board diversity, shareholder rights

Think of it like a puzzle: each piece is vital to understanding the bigger picture. By taking these factors into consideration, we can gain a more complete understanding of a project’s overall impact on the world, which can be valuable when making decisions about investments or partnerships. You may have also seen these principles reflected in frameworks and regulations such as the EU’s Corporate Sustainability Reporting Directive (CSRD).

Indeed, these considerations will only continue to become more important over time. We’re facing a myriad of global challenges like climate change, inequality, and social injustice that frameworks like the UN SDGs aim to address (we talk more about it here). This is alongside a growing awareness among investors and customers of the need to address deeply rooted issues as such, as well as growing evidence that organisations with strong ESG performance tend to create more value and outperform their peers in the long run (higher optimisation and productivity, less volatility and regulatory interventions, you name it). It can be a win-win situation. It’s therefore for very good reasons that ESG considerations have become increasingly relevant for investors and stakeholders to bear this in mind if they hope to make truly informed decisions, and contribute to a more sustainable and just environment. In today’s world, being responsible in an ESG sense is no longer just a nice-to-have, we’d argue it’s a basic, humane requirement. It’s more important than ever, and only fair, that we do our part.

“Businesses designed to create value for society are also good businesses that manage to sustain themselves during crises.” (Source)

There’s often an unspoken assumption that being a responsible business is a “soft” alternative to profit-making. However, as a purpose-driven organisation, your purpose can include, but also be about more than just monetary figures. When done right, ESG can be holistically embedded into corporate strategy to create value in a manner that aligns with present narratives of sustainability and impact.

Andrea So,

Head of Insights at Emerge

If you enjoyed reading this article, feel free to support us by subscribing and collecting it in your wallet!

To learn more about what we do, be sure to check out our website https://www.emergetechlab.com/

Did you know? The value of ESG assets may surpass $50 trillion by 2025 - around one-third of the projected total assets under management globally. There’s no debating that ESG is a hot topic in today’s world, but what’s all the buzz about?

ESG is a type of framework used to evaluate the sustainability and societal impact of an organisation or project, and takes into account three key non-financial factors; environmental, social, and governance. We like to think of it as a way of asking “How good is this project for the planet and people?” Whilst different industries, sectors, and regions may have their own sets of priorities and standards when it comes to ESG, these are some of the most relevant areas under each three heads that people often look out for:

*          Environmental* (ie. How you impact the environment and manage those risks)

Air and water quality, biodiversity and ecosystem preservation, energy use and efficiency, GHG emissions, resource consumption and recycling, waste management

          Social (ie. How you interact with your stakeholders)

Supply chain responsibility, health and safety, human rights, labour practices, diversity and inclusion, community engagement, healthcare and education, political engagement, responsible innovation

          Governance (ie. How you manage and operate)

Overall structure and decision-making processes, transparency and accountability, executive compensation, board diversity, shareholder rights

Think of it like a puzzle: each piece is vital to understanding the bigger picture. By taking these factors into consideration, we can gain a more complete understanding of a project’s overall impact on the world, which can be valuable when making decisions about investments or partnerships. You may have also seen these principles reflected in frameworks and regulations such as the EU’s Corporate Sustainability Reporting Directive (CSRD).

Indeed, these considerations will only continue to become more important over time. We’re facing a myriad of global challenges like climate change, inequality, and social injustice that frameworks like the UN SDGs aim to address (we talk more about it here). This is alongside a growing awareness among investors and customers of the need to address deeply rooted issues as such, as well as growing evidence that organisations with strong ESG performance tend to create more value and outperform their peers in the long run (higher optimisation and productivity, less volatility and regulatory interventions, you name it). It can be a win-win situation. It’s therefore for very good reasons that ESG considerations have become increasingly relevant for investors and stakeholders to bear this in mind if they hope to make truly informed decisions, and contribute to a more sustainable and just environment. In today’s world, being responsible in an ESG sense is no longer just a nice-to-have, we’d argue it’s a basic, humane requirement. It’s more important than ever, and only fair, that we do our part.

“Businesses designed to create value for society are also good businesses that manage to sustain themselves during crises.” (Source)

There’s often an unspoken assumption that being a responsible business is a “soft” alternative to profit-making. However, as a purpose-driven organisation, your purpose can include, but also be about more than just monetary figures. When done right, ESG can be holistically embedded into corporate strategy to create value in a manner that aligns with present narratives of sustainability and impact.

Andrea So,

Head of Insights at Emerge

If you enjoyed reading this article, feel free to support us by subscribing and collecting it in your wallet!

To learn more about what we do, be sure to check out our website https://www.emergetechlab.com/