Demystifying ESG

The world is changing

As a threat of harm led to commitments to improve human lives and protect the environment, countries are transitioning to sustainable economies. This transition will impact organisations and businesses, no matter how big or small.

What is sustainability?

Sustainability is more than just climate change and carbon reduction. It is an approach to managing interlinked issues of resources, people and the planet in a way that will ensure the needs of the current generation are fulfilled without compromising our future generations. Achieving sustainability will lead to a balance between economic growth, environmental care and social well-being.

• Example: While building a hydroelectric dam may provide a source of renewable energy and employment opportunities, it could also have impacts on local and indigenous communities, the ecosystem and biodiversity.  Sustainability considers that all short and long term impacts should be considered as part of cost-benefit.

What is Environmental, Social, and Governance (ESG) and how does it relate to sustainability?

ESG is a widely accepted measure of sustainability that organisations can use to map out their journey to becoming more sustainable and understand how the transition to a more sustainable economy will impact them. 

More importantly, it is also the framework against which your sustainability credentials, and long-term viability, will be assessed by your most important stakeholders. 

Like sustainability, the individual elements of E, S, and G are interlinked and reflect both the internal changes that organisations can make to positively impact the world, as well as the external factors that may negatively impact them as an organisation.