Outlast- How ESG can benefit your business.

Authors: Mukund Rajan & Col. Rajeev Kumar

‘Outlast’ – How ESG can benefit your business is a book written by Dr Mukund Rajan and Col. Rajeev Kumar. ESG stands for Environment, Social & Governance related issues. This book extensively covers the Indian business environment and the need for ESG to facilitate and grow the Indian Economy.

The Covid-19 pandemic threw light on the under-preparation of several business organizations to tackle and manage global crises of such a magnitude. During the first few phases of the pandemic, the country experienced a huge wave of uncertainty and apprehension. This highlighted underlying issues which were often ignored in the pre-pandemic years:
a) Lack of technological penetration in the country, making it difficult for businesses to adapt and adjust to a remote approach.
b) Questionable standards of provisions made for organized and unorganized labour in the country.
c) Alarming lack of measures in place for tackling Climate Change and other relative environmental issues.

ESG has recently caught the fancy of the world market and business institutions. However, it is not a brand-spanking-new concept. ESG has been in existence for quite some time now, but the dynamic of ESG has changed greatly in the past two years due to a number of factors. Qualitatively, changes have been observed due to the following factors:
Greater exchange of Information:  The advent of technology and social media has increased the rate and ease at which information is exchanged and shared. Without considering the spread of fake news, technology has accelerated awareness among people.
Governance Probing:  Increased awareness has led to increased probing, questioning and taking stock of the situation. People are not unaware as in previous years.
Corporate Audit:  Corporate Audit is now easier to conduct due to the ease of tracking Corporate footprints. Increased trackability, has increased transparency, therefore is a need to emphasize ethical business practices by companies.

ESG mandates are steadily being adopted across the corporate world. The past two years have magnified the need for such standards to be put into place, from a long-term perspective. Since a short-term perspective has jeopardized the financial market on a global level. Such standards must be mandated, drafted and prepared in consultation with the stakeholders concerned. Stakeholder participation promotes transparency, accountability and sustainability in corporate relations in business.

In addition to social and governance issues, climate change has added yet another dimension to the already existing challenges faced by the Indian corporate sector. ESG has highlighted issues that were often overlooked and considered unimportant. Very few businesses have shown the inclination and determination to adopt and include sustainable business practices. The recognition still remains underdeveloped, however with increased awareness and information exchange, ESG is being recognized as the need of the hour. The authors speak of Investors being the first movers in this movement of recognition, with several of them refusing to back projects that are not sustainable for the long term. The current situation has forced one to take risks and therefore build resilience which has also given rise to a multiplicity of opportunities. For what was an after-thought, ESG has now risen to the top of agendas while formulating corporate strategy. However, one must remember that it is an ongoing process and must be consistently carried out. It is a concept that would take years before it would have been appropriately figured out.

The importance of ESG has been brilliantly summed up by Jamsetji Tata in the following wise words– “In a free enterprise, the communities are not just a stakeholder in a business, but the very reason for its existence.”

As aptly described above, ESG is not just an approach, but in fact a way of life!

Author: Digital Onca

Digital Onca is a blog that documents the concepts of Digital Marketing and Public Relations. Digital Onca is the effort to stay with the times, understand more deeply, more closely the working of a digital space that is steadfastly emerging around us.

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