Concepts that were once thought of as trade-offs to shareholder primacy and profitability are now viewed as essential for achieving a sustained competitive advantage in the marketplace. ESG has neatly packaged the converging environmental, social, and governance issues that present risks and opportunities in today’s global economy.
Environmental, social and governance (ESG) criteria have quickly become a global measurement of virtually every company’s commitment to performance as a steward of sustainable business, our planet and its people.
While sustainability is clearly a challenge, it also brings opportunities – developing new products, providing new services and meeting changing customer needs. Success requires Identifying these opportunities, realigning strategic choices, evolving the business model, optimizing the organization and setting out clear delivery programs.
Creating an ESG framework can provide a competitive advantage as ESG performance improvements directly influence operational, commercial, reputation and environmental risks and opportunities. ESG impacts can influence all parties along the value chain due to their interconnectedness and dependency. The competitive advantages of creating and ESG framework are illustrated in the table below.
