Environmental, Social, and Corporate Governance (ESG), though slow to gain traction, has captured the focus of investors, corporates, and financial institutions in Asia. It is a term that is hailed frequently in the financial sector, but it lacks universal benchmarks and a consensus on how it can be applied practically across different industries. The comprehensive and universal adoption of ESG in the ecosystem remains a tedious and seemingly elusive goal due to:

  • The different needs and requirements of stakeholders,
  • The proliferation of reporting and compliance standards and frameworks, and
  • The ambiguity of the term and what it encapsulates.

This article tackles these challenges and explores the key considerations corporates must account for to solidify its ESG practices.

In addition to a traditional focus on shareholders, companies need to consider a broad range of stakeholders to implement ESG effectively. While one may think dichotomously about the interests of both parties, integrating sustainable principles actually provides attractive returns for both. Companies that ‘play the long game’ by investing in long-term payoffs over short-term economic gains experience better cash flows and generate more revenue in future. By shifting the focus away from strictly companies to other stakeholders in the ecosystem, new pathways and partnerships for ESG integration are possible.

Collaboration is necessary to synthesise the various reporting standards that exist to establish a universally-accepted benchmark for companies to disclose and report on ESG across countries and sectors. One strategy taken by Ayala Corporation is the adoption of the IIRC’s Integrated Reporting Framework, which provides a cohesive approach to corporate reporting, merging the different reporting standards and communicating the full range of material factors pertinent to an organisation’s operations.

Read the full article about how partnerships can advance ESG by Prachi Seth at avpn.