What is ESG? Environmental Social Governance

Why has ESG gained significant importance in recent times?

ESG, which stands for Environmental, Social, and Governance, represents crucial pillars of responsible business conduct. ESG criteria have gained significant prominence in recent times due to several interrelated factors, including;

Global Awareness and Concerns about Climate Change and Environmental Degradation: Increasing awareness of climate change and its potential impacts on the planet has driven a growing interest in environmental sustainability. People, investors, businesses, and governments are increasingly recognising the need to address environmental issues and incorporate sustainable practices into their operations.

Investor Demand and Expectations:
Investors are increasingly considering non-financial factors, including ESG criteria, when making investment decisions. They seek to invest in companies that demonstrate a commitment to sustainable and responsible business practices. This demand has led to a surge in ESG investment funds and sustainable investment strategies.

Risk Mitigation and Long-Term Value Creation:
Incorporating ESG factors helps organisations mitigate risks associated with environmental and social issues, ultimately protecting their long-term value and reputation. Companies that proactively manage ESG risks are better positioned to adapt to changing regulations and societal expectations.

Regulatory Changes and Reporting Standards:
Governments and regulatory bodies in many regions are implementing or enhancing regulations that require companies to disclose their ESG-related activities and performance. This has increased the importance of ESG reporting and compliance to meet legal requirements and stakeholder expectations.

Stakeholder Activism and Engagement:
Stakeholders, including shareholders, customers, and employees, are becoming more active in advocating for sustainable and responsible business practices. Their influence is driving companies to adopt and improve their ESG initiatives to align with stakeholder expectations and maintain positive relationships.

Overall, the convergence of environmental challenges, societal expectations, regulatory changes and investor behaviour has propelled ESG into the spotlight, making it a critical consideration for organisations seeking to thrive in the evolving business landscape.

At PEL, we embrace accountability across all our operations, consistently upholding ESG principles daily. This commitment extends to our customers, employees, environment and society as a whole.

With our knowledge and experience in this area, we have the tools to help others incorporate ESG principles in their organisation. Here at PEL, we are excited about the possibility of working together with other businesses to further their ESG objectives. Call us today for more information on how we can help you.