ESG
What is the true meaning of environmental , social and governance ( ESG ) strategy ? We often hear this term , which can often seem interchangeable with ‘ sustainability strategy ’, but the terms alone are slightly different . Understanding this leads us to look deeper into their meanings and find out how these terms are nuanced , in order to leverage them in business . And by leverage , we mean understanding how to navigate investor requirements in order to be compliant with ESG as an organisation in the eyes of financial institutions .
“ What emissions do we currently emit in our business operations ? How can we make sure that we cut them down so that we actually can help the society we operate ?” says Henrik Sandin , Director and Principal ESG Specialist at Workiva .
“ That is such a small proportion of the actual big landscape we should consider here because if you look at the environmental side , nature is a big topic with the TNFD framework helping firms to assess and disclose nature related risk and impacts . Equally , nature related disclosures are a big part of the European Sustainability Reporting standards , under the Corporate Sustainability Reporting Directive , which aligns to the TNFD .”
Sustainability is the buzzword that we see across every corporate site , likewise the term ESG , but sustainability refers to the environmental , social and economic impacts of an organisation . The only difference here is the inclusion of economic factors as opposed to governance . However , governance is surely the starting point for businesses as the way decisions are made ultimately impacts economic growth , and implementing more eco-friendly and ethically compliant solutions will only require further conundrums .
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