ARG GROUP specialists offer a number of reasons why and why this ESG principle was developed:
ESG criteria appeared as a response to environmental degradation, global warming, increasing economic inequality between rich and poor countries, which created additional ground for the emergence and development of new financial instruments and criteria.
In Russian, this principle is interpreted as environmental, social and corporate governance.
Investors have realized that when evaluating investments, it is necessary to take into account their impact on society and the environment, while this impact must be responsible and lead to a positive result.
Modern society has begun to impose additional requirements on the activities of companies and, in addition to financial reporting, has begun to evaluate them in terms of investing in sustainable development. To be considered successful, a company must demonstrate not only a steady growth in its financial performance, but also have a certain reputation. ESG support allows the company to improve its reputation and increase brand awareness.
Issues of ecology, social development and corporate governance have become important factors in making investment decisions, which responsible investors have begun to use on an ongoing basis when building their portfolios.
Reasons
Reason
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Reason
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Reason
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Reason
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ESG has become a kind of business philosophy that must be shared by all interested parties and, first of all, shareholders and investors. If for some stakeholders the main criterion is a positive cash flow, and for others the focus is on ESG factors, then this can lead to too much difference in business development approaches.
Reason
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Environmental
What criteria is ESG based on:
Criterias
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Social criteria
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Management criteria or corporate governance criteria
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determine how much the company cares about the environment. These include issues such as greenhouse gas emissions, environmental pollution and use of natural resources, and compliance with environmental laws.
An effective ESG strategy involves combating operating costs, such as the consumption of raw materials, water or carbon, which can positively affect a company's bottom line.
An effective ESG strategy involves combating operating costs, such as the consumption of raw materials, water or carbon, which can positively affect a company's bottom line.
Reflect the company's attitude towards staff, suppliers, customers and partners. This also includes the health and safety of employees, the use of child and slave labor, the professional development of employees, harmful working conditions, respect for human rights, responsibility to customers for the quality of goods. It was found that a well-thought-out ESG strategy helps the company in attracting and retaining competent employees, increasing staff motivation, and increasing labor productivity.
Are associated with the effectiveness of management, the validity of the remuneration of managers, the rights of shareholders, the quality of audit, fraud and corruption.
Adhering to the principles of ESG from ARG GROUP experts, the company receives a number of advantages, including: higher attractiveness from investors and financial institutions, higher financial performance, better labor productivity. And in the long term, compliance with ESG will improve the business reputation and create a positive image of the company, reduce the cost of environmental taxes, improve the manufacturability and innovation of the business.
ESG stats.
The best way to improve your professional skills and increase your value
- 97%2018A 2018 study found that about 97% of investors worldwide conduct either an informal ESG assessment or a structured and methodical analysis of non-financial data about companies that are potential investment targets.
- 19%2017The number of such investors increased
by 19% in just one year, as in 2017 there
were only 78% of such investors. - 3%MOBILE UIIt is noteworthy that at the end of 2017, only 3% of investors reported that they were not interested in ESG factors at all.
