Sustainability presents a unique opportunity to reshape the environmental, social, economic, and governance landscape, but for this transformation to take place, adequate financing is crucial. Yet, one of the major barriers to this shift is the funding gap. Bridging this gap requires collective action from governments, financial institutions, private investors, and entrepreneurs. With the effects of climate change, pollution, scarcity and social injustices becoming more and more evident, businesses and organizations are under pressure to reduce their environmental impact and operate more responsibly. This includes preparing, assessing and disclosing information about their ESG and Sustainability activities.
There is a growing recognition that ESG can and should be viewed as a core lever in an organization’s success, by expanding its economic, environmental and social development pathways, building competitive advantage and accelerating sustainability and prosperity. This will enable investors to allocate their capital towards companies that demonstrate strong ESG practices. Organizations that prioritize ESG initiatives are often highly regarded by investors, other businesses and clients. This further means that companies will increasingly integrate sustainable practices into their business strategies to attract investors, comply with regulatory requirements, and enhance their reputation
In today’s interconnected and rapidly changing world, sustainability has become a key priority for businesses, government, and societies. The increasing recognition of the environmental, social and economic impacts of corporate activities has led to a demand for responsible business practices that transcends beyond profit maximization.
While ESG Investing has emerged as a critical strategy for impact investment, offering a holistic approach to generating both financial returns and positive social and environmental and governance outcomes, ESG Reporting assess and evaluate ESG data of companies based on their performance and measurement across three pillars: Environmental, Social, and Governance. ESG Reports allow companies to answer a wide variety of questions raised by stakeholders, helping stakeholders and observers understand more clearly the impacts of a company’s activities on the environment, society and governance, and vice versa. Therefore, one can consider reporting as a tool to show transparency and convince observers that the company’s or entity’s actions are sincere.
Data-driven evidence of an organization’s sustainability performance, social inclusivity and governance commitments can enhance an organization’s reputation and competitiveness. ESG data helps organizations showcase their commitment to sustainable development.
Some benefits of ESG Investing:
Opportunity to make real difference in the world, making a positive impact in the lives of people and communities.
Creating solutions to environmental, and social problems which enhances value and increases respect of the organization and brand_ valuable measure for business growth and development.
Help businesses and organizations operate more sustainably, validating their sustainability commitments to enhance their market competitiveness.
ESG maybe a cost intensive operation, but investing in sustainability mitigates risk in terms of obsolescence and making assets future-proof.
An opportunity to invest in the best sector, present and future, and engage in market trends that drive impactful change like the carbon market.
Encouraging long term performance in sustainable business practices.
Some benefits of ESG Reporting:
Accountability and transparency are critical principles of ESG. Transparency and accountability build trust, help to manage reputational risks, and foster investor and stakeholder’s confidence. Inadequate transparency can pose significant risks to stakeholders’ trust and organizational reputation.
Implementing ESG reporting framework can improve and accelerate organizational strategies and actions on sustainability by shaping policies and practices related to the environment, society; governance.
The increased value resulting from adopting the ESG reporting framework is demonstrated through ESG strategies, actions and how ESG reporting is conducted. Therefore, ESG reporting strengthens both the organization and the community.
Compliance and conformity to standardization. Standardized quantitative data and qualitative assessable information play a crucial role in the global ESG landscape, building trust that can only be gained through a set of globally standardized and fully numeric/assessable indicators. High caliber data and information generated against KPIs enables organizations to understand and report on their status and set goals, make informed decisions, showcase commitment to sustainable development, attract investment, manage risks and opportunities, engage their personnel and stakeholders, meet relevant compliance requirements, while driving positive change within and outside their organization in line with ESG principles.
Globally standardized ESG Report can strengthen an organization’s credit rating and position in the global markets.
Common questions industry leaders ask:
How can they take ESG responsibility? How can they know what action(s) to take? How can they cut down on their carbon footprint? How can they prepare and disclose their reporting?
Today, there are many sustainability initiatives that can be implemented by organizations. Going green or generally sustainable is no longer a choice but an obligation. However, the first step to take action is to establish an ESG team. There after is to consider your options. You can achieve this by engaging with stakeholders to understand their expectations and concerns and consider their input in decision-making to know what issues are more pressing; Conduct transparent study into area of interest in line with company priorities and develop initiatives in conformity with reporting principles.
If one is feeling overwhelmed by all the information out there about sustainability practices and reporting standards, talk to experts. Getting expert advice is often invaluable when making big decisions on sustainability practices.
At Abbott Fudali Investment, we specialize in advising on the issue of investment on company’s sustainability, and preparing ESG Reports for companies on their long term sustainability operations. Our ESG Reporting platform is designed to guide organizations in building trusted, globally standardized data over time, regardless of their size, geographic location and income like regional and economic differences, including flexibility for organizations in developing regions and those with limited resources. For example, the platform is designed to be accessible to SMEs and large organizations in developed and developing countries, whether they are required to report on ESG or are engaging in ESG on a voluntary basis.
We believe in supporting and promoting businesses that demonstrate outstanding growth to commitment on sustainable approach, which is one reason why we are honored to be featured on CXO India, a publishing platform very much dedicated to amplifying sustainability voices.
For more information, please reach out to Chinedu Ololo on LinkedIn.
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