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ESG may be boring work, but it is good for us
ESG is fundamentally a business transformation process that demands tedious and intentional hard work – precisely how companies will build trust with their customers, employees and investors.
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Demonstrators protesting against the use of fossil fuels in London last month during a march to demand action on climate change.
PHOTO: AFP
Jason Leow and Joyce Cheng
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The past two years have seen a surge of interest in environmental, social and governance, or ESG, issues. That surge came with many companies talking up, productising and event-branding ESG. The net result is to have made the moment rather faddish. ESG critics have labelled the practice "woke". It is time to set the record straight: ESG is not a "woke" exercise. It is trust-building, it is boring work, and it is good for us.
There are widespread expectations for businesses to act, as the pressing issues of our time - climate change, social inequality, and ethical business behaviours - need sustained commitment to resolve. Regulators across Asia are stepping up ESG disclosure requirements: for example, financial institutions in Japan, Hong Kong and Singapore have announced climate reporting policies. Beyond increasing disclosure requirements, stakeholders are demanding real actions from businesses.
