Many of us are familiar with this term, which has become a buzzword these days i.e., ESG which stands for Environmental, Social, and Governance.
In business, ESG is closely related to sustainability. In a business context, sustainability is not only about the company's business model but also how its products and services contribute to sustainable development.
It's more than just following a regulation
It's more than just norms and policies
It's more than just sustainability and environmental damage mitigation
According to McKinsey, in one of their article they say, Your business, like every business, is deeply intertwined with environmental, social, and governance (ESG) concerns. It makes sense, that ESG proposition has a higher value creation.
They continue by saying that, "ESG is an inextricable part of how you do business, its individual elements are themselves intertwined. For example, social criteria overlaps with environmental criteria and governance when companies seek to comply with environmental laws and broader concerns about sustainability. Our focus is mostly on environmental and social criteria, but, as every leader knows, governance can never be hermetically separate. Indeed, excelling in governance calls for mastering not just the letter of laws but also their spirit—such as working and regulating with organisations with transparency and integrity."
By moving towards a more human way, "...instead of formalistically submitting a report and letting the results speak for themselves", businesses can use ESG in order to add real value to their balance sheet.
McKinsey also share the percentage of what impact can ESG have, towards our society, environment and governance.
The E in ESG, environmental criteria, talks about how organisations chose to embrace the nature of work by using and preserving the natural resources around us. It includes how well we are supporting and preventing our mother earth from carbon emissions and climate change. As far we know, most companies take in energy from natural resources and either or both indirectly or directly are responsible for affecting the environment. But change is possible, when we measure and understand the challenges and possibilities and when we put our thoughts into action; by using the 'G' in ESG.
S, social criteria, addresses our community, our people, our stakeholders to whom we serve as an organisation and what value we are providing to our people (humans); what purpose we are serving as an organisation. It's a relationship between an organisation and the humanitarian society; the world and how well they connect, collaborate and come together in order to make a safer, compassionate and a kinder place for everyone to grow, nurture and be a better human being everyday. This is only possible, when we determine our organisation more towards re-humanising governance, which again directs us to the fact of how important 'G' is, in ESG.
G, governance, the most important ingredient in ESG has still a long way to travel from where it currently resides, which is to comply with the law, and meet the needs of external stakeholders. This is where it needs to change, because governance has much more to offer than that. It has the capability and potential to integrate all three segments together, to protect and preserve our mother earth, to create a space of true humankind, all by using the right governance in action.
Governance is the hardwork that reconnects us with the deeper understanding of humans, society, environment, decision-making and culture; and how all these are interconnected. It's the beginning of an upward spiral journey, which maintains this exquisite balance, equanimity, between Environment, Social and Governance that starts from compassion and true understanding, to realise that we belong to each other and that’s coming forward now.
How can we not harvest this understanding in this moment?
It is enormous.
It is huge.
“We must accept our reality in all its immensity.”
Joanna Macy, philosopher of ecology and a Buddhist teacher and a root teacher of the work 'That Reconnects', from OnBeing in a recent podcast says,
"Well, it seems clear that we who are alive now are here for something and witnessing something for our planet that has not happened at any time before. And so we who are alive now and who are called to — who feel called, those of us who feel called to love our world — to love our world has been at the core of every faith tradition, to be grateful for it, to teach ourselves how to see beauty, how to treasure it, how to celebrate, how — if it must disappear, if there’s dying — how to be grateful."
She further shares, an elegy, which is written by Rainer Maria Rilke who wrote these lines in his Letters to a Young Poet.
“Earth, isn’t this what you want? To arise in us, invisible?
Is it not your dream, to enter us so wholly
there’s nothing left outside us to see?
What, if not transformation,
is your deepest purpose? Earth, my love,
I want it too. Believe me,
no more of your springtimes are needed
to win me over—even one flower
is more than enough. Before I was named
I belonged to you. I seek no other law
than yours, and know I can trust
the death you will bring."