As the landscape of environmental, social, and governance (ESG) considerations continues to evolve, it is essential for companies to stay ahead of the curve and adapt their strategies accordingly.
GlobalData says the second phase of ESG has arrived, changing the agenda around environmental reporting from a voluntary regime to a mandatory one. Transparency will no longer be driven by consumer pressure but by government mandates.
It means tougher new environmental laws are on the way relating to mandatory reporting, carbon pricing, and carbon import tariffs, as well as more state support and investment in clean energy technologies.
ESG 2.0 will be less forgiving of poor performers, especially on environmental issues.
Christopher Papadopoullos, senior analyst in GlobalData’s thematic intelligence team warns that focusing on reporting and setting targets for some distant future date is no longer enough.
"Companies need to show that they are taking action on ESG issues, especially emissions, across their complete value chain and not simply their own operations. Those that cannot produce robust ESG data, especially emissions data, will struggle to trade internationally, even if they are not covered by mandatory reporting requirements. Those companies that cannot provide low-carbon goods and services will be the ones that miss out on growth opportunities.”
