ESG, which stands for Environmental, Social and Governance, became popular during the pandemic, as industry leaders recognized the need for better management of natural resources, energy and waste.
Throughout the crisis, business owners formally assessed initiatives related to environmental sustainability, social responsibilities and ethical treatment of animals. Investors used these criteria to evaluate assets and make better decisions based on long-term profitability.
Experts do not always agree on how to address these issues. In the absence of standard methodologies, here are some points to consider:
Implementation: How will you translate ESG from a generic concept to daily measurable metrics across industries and business sectors?
Decisioning: How will you evaluate assets from multiple points of view to understand their impact on environmental, social and regulatory frameworks when making investment decisions? How will these factors inform your funding decision and provide a meaningful ROI?
Predictive analysis: What are your objectives for implementing ESG standards – will you use the standards to measure corporate responsibility or more as a marketing tool?
Compensation: How will you tie ESG objectives to senior management compensation to align ESG objectives and optimize results?
Assessment: How will you obtain consistent metrics, transparency and regulatory guidelines across regions when applying ESG standards?
With summer fast approaching, it is my hope that lessons learned during the pandemic will make us better custodians of our planet, with ESG initiatives powering economic health and prosperity.
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Partner at LYSTAR GROUP
Tracy Lai provides strategic and business development solutions to executives, and entrepreneur. Her professional experience includes work at Fortune 500 companies including Intel and RBS, and startups. Her expertise covers business development, risk management, project management and investor relations, in Financial Services, FinTech, Innovation, Technology and Education. As management consultant and FinTech advisor, she holds multiple senior roles with focus on cross border and cross industry collaboration, including projects in US, Asia and Europe.