The recent buzz that we are hearing often in the corporate world is that of ESG or environmental, social and governance. Compliance with ESG goals is becoming extremely important, not only for statutory reasons but also to showcase the responsibility the corporate carries as an organization.

As it is a fairly new term, many may not be aware of what ESG goals are. ESG goals are a set of norms that apply to a company’s operations to adopt better environment-friendly practices, showcase social responsibility and implement better governance.

Environment: As a member of corporate India, we are expected to perform as a steward of nature. Not only are we expected to refrain from actions that harm our environment, but our policies should also be to ensure that the present crisis faced by us is reversed to the best of our capabilities.

Social: While Corporate Social Responsibility has been a mandated norm for many years now, there is still a need to put extra effort to ensure that life and living conditions improve not only within the organization but direct and indirect stakeholders of the company and the social communities also benefit from its growth.

Governance: Anyone having an iota of interest in the business world, would not oppose better measures put in place when it comes to corporate leadership, executive pay, audits, internal controls, and shareholder rights. We need to understand that an organization is successful only when all its stakeholders enjoy the benefits, but within the limitations laid down in the policies.

The pillars of ESG are quite extensive and are difficult to address in a single blog. However, I will try and explore them in the subsequent weeks.

I feel ESG is a welcome structure to follow, as it captures all angles of business and society. While it may not reflect on the financial performance of the organization, it has its effects on its sustainability. However, there is a lot of confusion around its reporting structure and compliance. These, I am sure, will go as we progress in our journey.

Lastly, I would like to state that as a popular measure, we have been focusing a lot on the ‘E’ and the ‘S’ aspects. But no one can deny that every organization also needs a strong ‘G’ in place without which we can hardly get the benefits we are targeting to avail ourselves through ESG. So, it will be fair to say that our earlier path was not wrong, ESG goals are just an added measure.