I will write a post about ESG management this time. With the growing emphasis on environmental friendliness and corporate social responsibility these days, ESG management has become a crucial keyword. Therefore, from a corporate perspective, ESG management has become an essential element, and nearly all companies are either implementing or transitioning to ESG management practices.
ESG management
‘ESG’ stands for the non-financial elements of a company, which are Environment, Social, and Governance. In other words, ‘ESG management’ can be defined as the persuit of sustainable development through environmentally-friendly practices, socially responsible actions, and transparent governance from a long-term perspective.
Environment
The most crucial aspect within the realm of the environment is the issue of climate change and carbon emissions. In order to ensure the sustainability and survival of humanity worldwide, companies are now facing a situation where they must boldly strive for significant reductions in carbon emissions and even go further to achieve carbon neutrality. Alongside this, resource and waste management for pollution mitigation, as well as the pursuit of energy efficiency involving reduced consumption of resources and energy, have emerged as significant issues.
ESG enables companies to actively address environmental concerns, thereby enhancing their sustainability and enabling long-term business growth. Furthermore, as concerns risk damaging their reputation.
Social
On the social front, companies need to exert effort in ensuring human rights, safeguarding data, considering diversity, and establishing collaborative relationships with supply chains and local communities.
ESG empowers companies to actively address societal issues, enabling them to fulfill their social responsibilities and earn the trust and support of customers. Moreover, as awareness of societal issues continues to grow, companies that disregard these considerations could face social condemnation.
Governance
From a governance perspective, it is necessary to establish a transparent and highly reliable board of directors and an audit committee that supports the realization of these environmental and social values within the company. Additionally, ensuring compliance with corporate ethics in terms of preventing bribery, corruption, and adhering to ethical standards in lobbying and political donations activities is essential to uphold strong governance values.
ESG ensures that a company’s governance is transparent and operated fairly, thereby enhancing the company’s credibility and respect. Investors who recognize this can make more informed investment decisions regarding the company.
