“Who Cares Wins”

The main concept of 'sustainability' dates back to more than 35 years ago, when it appeared for the first time in 1987 in the famous Brundtland Report (also entitled 'Our Common Future') produced by several countries for the United Nations (UN).

The term ESG was first conceived in 2005 in a landmark study titled “Who Cares Wins,[i]” but it was not until more than a decade later that we started seeing the rise of the Environmental, Social and Governance era. From ESG related roles, to adopting new reporting standards, businesses began to pay attention.

[i] Who Cares Win, The Global Compact, Ivo Knoepfel Click here to read the article

Today the main definitions[ii] in the Principles of Responsible Investing (PRI) Reporting Framework define Environmental, Social and Governance (ESG) issues as follows:

Environmental (E) Issues relating to the quality and functioning of the natural environment and natural systems. These include: biodiversity loss; greenhouse gas (GHG) emissions, climate change, renewable energy, energy efficiency, air, water or resource depletion or pollution, waste management, stratospheric ozone depletion, changes in land use, ocean acidification and changes to the nitrogen and phosphorus cycles.

Social (S) Issues relating to the rights, well-being and interests of people and communities. These include: human rights, labour standards in the supply chain, child, slave and bonded labour, workplace health and safety, freedom of association and freedom of expression, human capital management and employee relations; diversity; relations with local communities, activities in conflict zones, health and access to medicine etc.

Governance (G) Issues relating to: board structure, size, diversity, skills and independence, executive pay, shareholder rights, stakeholder interaction, disclosure of information, business ethics, bribery and corruption, internal controls and risk management, and, in general, issues dealing with the relationship between a company’s management, its board, its shareholders and its other stakeholders.

We are clearly seeing a transformational shift from discussion to action in the regulatory arena and beyond.
The companies who care will undoubtedly be the ones that will be rewarded.

[ii] Principles of Responsible Investing (PRI)