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Sanjay Pasari : Adopting ESG will Benefit You in Numerous Ways

Environmental, social and governance (ESG) issues should be a top concern of corporate management and boards. Check the views of Sanjay Pasari on ESG .

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Sanjay Pasari : Adopting ESG will Benefit You in Numerous Ways

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  1. Adopting ESG will benefit you in numerous ways Explain 5 different benefits

  2. Organizations may wonder if it is worthwhile to engage in enhancing environmental, social, and governance (ESG) beyond what is required by the law given the conflicting demands on limited resources and attention. Strong ESG performance is linked to numerous significant advantages and favorable financial results, nevertheless. Here are five advantages of ESG that will persuade your company to give it top attention if you're still on the fence about it. Sanjay Pasari of Banco Consultant discusses the benefits of adopting ESG within an organization "it's no surprise that investors and regulators are focusing on evaluating companies that use ESG frameworks and sustainable business practices. In light of India's recent pledge to achieve zero carbon emissions by 2070 at the COP 26 summit, companies need to implement ESG.

  3. 1: Streamlined compliance with regulations ESG, as we noted above, is a method of going above and beyond what is demanded by the laws as they currently stand. Why does that matter? Because regulatory compliance will inevitably fall into place when businesses concentrate on enhancing ESG performance. Take carbon emissions as an illustration. One frequent ESG goal is to reduce emissions. Numerous measures taken by businesses to cut emissions, such as switching to renewable energy sources, can also assist them in adhering to regulatory and permit requirements. Additionally, authorities can see businesses that have proven ESG goals as being more responsible. Because of this, authorities could be less inclined to closely examine your business and more forgiving if a non-conformance is found. State and federal authorities can easily access this sort of information thanks to public reporting of ESG performance.

  4. 2: Decreased operating expenses Lowering operational expenses can also be achieved through improving ESG performance. ESG policies can reduce operational earnings by as much as 60%, according to McKinsey. ESG may save operational costs in a variety of different ways. ESG frequently emphasizes lowering energy use, which may assist businesses in saving money on utilities. ESG also places a focus on how to use less water and raw materials. ESG may assist businesses in making financial savings by reducing waste and enhancing resource efficiency when these resources become more expensive. 3: Enhanced returns to shareholders Better investor returns are also correlated with a strong performance in the ESG (environment, social, and governance) areas. 63 percent of the time, ESG propositions had a positive influence on equity returns, according to a McKinsey examination of over 2,000 studies. Only 8% of the time did pay attention to environmental, social, and governance concerns have a negative effect. With outcomes like these, it stands to reason that more investors are wanting to invest in businesses that exhibit strong ESG performance. Companies looking to raise financing may find this advantageous.

  5. 4: Increased client loyalty Customers also want to know that the companies they are patronizing are responsible environmental stewards. One study indicated that 88% of consumers will be more loyal to a business that supports social or environmental concerns. ESG performance is a strong predictor of customer loyalty. But customers today are more informed than ever before, and they can spot greenwashing. Both B2C and B2B clients can attest to this. Because of this, corporations have started to value evidence-based ESG objectives above sentimental, upbeat sustainability narratives. 5: Increased staff involvement Employee engagement is also influenced by initiatives to enhance ESG performance. According to research by Marsh & McLennan, companies with the highest employee satisfaction had ESG ratings that were 14% better than the worldwide average, which was probably a result of these companies' superior environmental performance. This implies that organizations may find it simpler to recruit and retain talent if they make a concentrated effort to enhance ESG performance.

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