Latest News | ESG Integration in Business Will Help Create Long-term Value: Report

New Delhi, Aug 3 (PTI) Environmental, social and corporate governance (ESG) is gaining traction as an important strategy and is leading to optimisation of business processes as well as long-term value creation, says a report.

According to the report by EY -- ‘Can ESG help future proof your business?' -- integration of ESG aspects in the business will help in long-term value creation, thereby decreasing risk factors rising from national and global factors.

Moreover, the COVID-19 pandemic has been instrumental in reinforcing the importance of the ESG framework as a key approach to long-term business resilience.

"In an increasingly uncertain and volatile world that is throwing up new challenges for the businesses, ESG provides a framework for businesses for staying resilient by holistically safeguarding people, the planet and profits.

"ESG is the tool that categorizes aspects that were conventionally associated with sustainability and corporate responsibility but have material financial impact on the organization's short and/or long-term value," said Chaitanya Kalia, Partner and Leader, Climate Change and Sustainability Services (CCaSS), EY India.

The report highlights the importance of ESG as a framework for businesses for staying resilient by holistically safeguarding profits, people, and the planet.

A well-developed ESG governance in business helps gauge the risks and issues that may not have been possible through conventional mechanisms, the report said.

"Integration of ESG into business models is an absolute must for building in resilience and future proofing businesses from further shocks. Indian companies are realizing the need to gear up against the ongoing challenges and the ones that future hold," said Shailesh Tyagi, Partner, CCaSS, EY India.

Findings from the recent EY's Global Investor Survey, covering views of around 300 institutional investors on ESG performance, show a clear trend towards increasing integration of sustainability or non-?nancial factors in investment decisions making ESG integration a tool that will pave the way for future proofing of business.

On the global front (as indicated by the World Economic Forum), over the past decade, the top five global risks have shifted from economic to environmental and social issues.

The top five risks of the decade that can majorly impact the society include infectious diseases, climate action failure, weapons of mass destruction, biodiversity loss and natural resource crisis, the report said.

The likelihood of extreme weather, climate action failure, human environmental damage, infectious diseases and biodiversity loss becoming a reality is increasing day by day, it added.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)