Now is the time for corporations to recognize the value environmental, social, and governance initiatives can have. Devoting resources to green practices, providing amenities to employees and communities, and improving their governments can significantly impact brand image, employee loyalty and productivity, and operational costs. Compromising sustainable practices in the name of financial targets destroys a company’s value. While corporations strive for improved ESG practices, they should be aware of the most significant ESG risks and growth opportunities. COVID-19 has changed the landscape of business operations, and the spread of this virus could shed light on the companies that prioritize ESG initiatives (or those that do not). Boards and executives should also note the increase in investments in emerging markets, the demand for reporting standardization, the need for reductions in supply chain CO2 emissions, and the heightened focus on social factors.
The growing ESG market is not just impacting corporations; investor groups and rating agencies also need to evaluate the changes taking place. Within the near future, they will be able to adopt new standardization practices for reporting. They will also need to consider government agendas for ESG issues. Regulators are gradually influencing the requirements of ESG practices and reporting. Investors and rating agencies will need to stay on top of these growing trends and ensure they are evaluating and providing accurate ESG data. With ESG priorities constantly evolving, no organization, investor, or rating agency can become complacent. Each party will need to continually evaluate the sustainability landscape, growing consumer concerns for environmental and social policies, and governance standards. SGS can provide verification, advisory and diagnostics services for rating agencies and investors to help them stay on top of ESG risks and to ensure they are working with reliable data. We can also help corporations stay up to date on ESG matters, aid in conserving resources and improve sustainability performance for a brighter future.
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