Obstacles in ESG: Engaging in Environmental, Social, and Corporate Governance to pluralize Growth
Investors, corporates and banks alike are increasingly realizing the importance of environmental, social and governance (ESG) criteria at a time when the climate crisis threatens and social issues have been pushed to the forefront. Various international organizations like the Task Force on Climate-related Financial Disclosures (TCFD), Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) are defining relevant benchmarks to embed ESG metrics.
Corporate leaders recognize that businesses can play a critical role in addressing pressing issues such as climate change. However, corporations face a number of obstacles in implementing ESG, including a lack of ESG data, unequal standardization of ESG data and ratings, and low bond market liquidity, making it difficult to incorporate ESG factors into credit analysis. But by integrating technologies and creativity, they will realign their systems and activities towards more mutual value structures that foster a sustainable and equitable future.
At the time of the pandemic, the companies that stick to the ESG framework are future proofing their market i.e Companies practicing ESG investments maximize income, which will allow them to create shared wealth for their partners and societies, thereby accelerating collective growth.
