06 January 2023 | I Smart Business Solutions

ESG and climate trends to keep an eye on in 2023

ESG, or Environmental, Social, and Governance, is a set of standards that assesses a company''s impact on society and the environment, as well as its transparency and accountability.

According to the CBI, two-thirds of investorsLink opens in a new window consider ESG factors when investing in a company, implying that ESG has the potential to grow your business while also benefiting the environment and community.

An ESG strategy can show that the company is reducing risks, such as adapting manufacturing processes to meet future environmental legislation, making the company a good bet for long-term growth.

With ESG as an important component for business growth, it can be beneficial to understand what ESG is, where your company can implement its principles and approaches, and how it can benefit your organization.

ESG refers to a company's impact on the environment and society, as well as its governance in terms of company leadership, executive pay, audits, internal controls, and shareholder rights.

It assesses how your company integrates environmental, social, and governance practices into its operations, as well as your business model, impact, and sustainability.

The three components that make up ESG are environmental, social and governance.
Even if your company isn't looking for investment, implementing an ESG framework has advantages ranging from risk reduction and cost reduction to improved reputation and attracting new customers.

Why is ESG growth picking up?
Global sustainability challenges such as flood risk and rising sea levels, privacy and data security, demographic shifts, and regulatory pressures are introducing novel risk factors for investors. As companies face increasing global complexity, investors may reconsider traditional investment strategies.

The world is evolving.
Climate risk, increased regulatory pressures, social and demographic shifts, and privacy and data security concerns all pose new or increasing risks to investors. The economic stress caused by the COVID-19 pandemic has impacted companies' exposure to ESG risks and their ability to manage them. Companies that do not adequately manage their ESG or climate risk face increasing complexities and scrutiny.

Interest from millennial investors all over the world has already contributed to the rapid growth of ESG investment. Bank of America Merrill Lynch stated in a 2018 survey that they could "conservatively estimate" USD 20 trillion in asset growth in US-domiciled ESG funds alone over the next two decades.

Other Press Releases from I Smart Business Solutions

27/1/2023 - iSmart provides a breath of fresh air When I asked David Fenton for a bit of background on himself and his interests, I didn’t expect him to tell me that he was once ranked 8th in the world at Karate - and competed for the Great Britain team!

06/1/2023 - Electric Car Trends for 2023 Prior to the prohibition of gasoline and diesel vehicles, there are concerns about a scarcity of charging stations and fuel prices.

14/12/2022 - Importance of Bespoke Ergonomic Interior Design and Benefits to Health and Business. Since we spend the majority of our time indoors, our surroundings greatly influence how we behave psychologically.

13/12/2022 - Cost of living crisis : How to save money in business When reading about printers, have you come across the terms genuine and compatible ink cartridges and wondered what made them different?

13/12/2022 - How safe is the air quality at work and how do you manage office environment. Your office building''s indoor air quality is more significant than you may realise.