As a concept, ESG has been around for a long time with its origins going back as far as 2005. Today ESG emerges as a tool for the management to deliver great returns to all stakeholders of a business. Many tenets of the idea have been written into laws. In the meantime, we have seen other ideas like socially responsible investing or SRI that would screen investments in sectors with negative connotations. Stock exchanges across the world seek to report on ESG principles and at the same time ESG compliance opens up doors for global funding for businesses across the world. For a CEO who cares about the long-term sustainability of the business, ESG is an opportunity to create value, drive profitability and also raise capital. ESG bonds have already made a mark in India with Indian companies raising close to $5 billion in the calendar year 2021 so far.
Another concept that spoke about responsible corporate behavior and management was the one about the triple bottom line, a business concept that expects firms to commit to measuring their social and environmental impact in addition to their financial performance or focusing on generating profit, generally referred to as “bottom line”, as described by HBR. Read more