After COVID-19, ESG Principles More Important than Ever to Achieve SDGs
As parts of the world recover from the COVID-19 pandemic, we look at how environmental, social and governance (ESG) principles and guidelines can present a way forward in achieving the United Nations Sustainable Development Goals (SDGs), and in serving as a measure to prevent pandemics such as COVID-19 from happening again.
Parts of the Philippines remain in quarantine more than a year after the first case of COVID-19 was detected in the country. | Photo by Jhudel Baguio via Unsplash.com
More than a year on and the COVID-19 pandemic continues to disrupt and even ravage most of our planet – new strains are appearing and renewed surges are happening around the world. One bright spot is the development and deployment of vaccines, although this has been largely in the developed world and needs to be scaled-up in poorer and harder-hit counties. There is also increased and more serious talk about the post-pandemic world and how the global economy can, and must, quickly bounce back.
Hold Your Horses – It’s a Bumpy Ride Ahead
But before we get too excited, let us take stock of where we are now and what kind of world we want to be in once the virus is thrust into oblivion. Yes, it is true the global economy has plummeted, especially for industries such as airlines, resorts, and leisure activities. At the same time, environmental and climate problems that existed before the coronavirus are still here and may perhaps be far worse now.
Nature has taken a back seat in many parts of the world due to the pandemic. I recently wrote in an article that this pandemic was caused by our abuse and misuse of the natural world – and if we want to avoid such in the future, we have to seriously move towards a green recovery and get back on track for climate action. This is even more crucial if we are to achieve our Sustainable Development Goals (SDGs) by 2030. A tall order, but not impossible.
The SDGs serve as a "blueprint to achieve a better and more sustainable future for all." The goals were adopted in 2015 by the United Nations General Assembly and are intended to be achieved by 2030.
ESG and SDGs Are Everybody’s Business
We’ve heard it before and it cannot be overstated – achieving the SDGs by 2030 requires all stakeholders to work together. Progress has been stalled by the pandemic but it’s safe to say that the global commitment to achieve these by the end of the decade is stronger than ever. Our COVID-19 recovery and the “new normal” need to align with and scale-up efforts to achieve the goals.
So where does ESG come into play here? Does is matter for achieving the SDGs and for our post-COVID world?
First, some basics. ESG – or Environment, Social and Governance principles – are a set of guidelines which companies or organizations can factor into their business, operations, or purpose. Although more commonly seen in financial and investment circles, organizations across different sectors now use ESG to measure their sustainability and ethical impact.
Some of the issues that these principles look at include: environmental and climate footprint or operations; working conditions of staff across all levels; engagement of stakeholders; respect for law and human and other rights; and governance structures, including transparency, accountability and grievance mechanisms.
ESG principles and guidelines put a “heart to investing.” They help make environmental, climate, sustainability, and social issues an integral part of the organization, ingrained in the “DNA” of the company and its people. They also guide decision-making and help avoid or mitigate potential risks.
More importantly, having ESG policies sends a strong signal to one’s key stakeholders– and to the general public – that the organization values and respects environment and social issues in its operations, down to its core.
Now back to our question: does ESG matter for SDGs in the new normal after the pandemic? The answer is of course yes, for several reasons.
Companies practicing ESG principles and tools wow investors who are looking for more sustainable and socially-conscious companies to put their money in. via Investors.com
First, given that COVID-19 is a consequence of our mishandling of nature, having ESG policies and procedures in place allows an organization to contribute to efforts to prevent the next pandemic. A more sustainable business that is aware of its impact on the environment helps lessen the risk of zoonosis jumping to humans once again. It also makes perfect business sense to avoid any undertaking which can upend your operations.
Second, ESG will allow for some introspection to be able to align the organization’s objectives, priorities and operations with achieving the SDGs. As more and more governments, stock exchanges, and regulators require disclosure of a company’s sustainability practices, directors and trustees will be pressed to comply with these requirements which are often linked to the SDGs themselves.
Third, ESG sends a strong signal to your stakeholders that you take sustainability and the SDGs seriously, making them your business. Today, more investors are taking into account the climate impacts of where their funds go. On the other hand, NGOs and activists want transparency and accountability from business and avoid potential greenwashing. This also allows for the opportunity to engage in meaningful dialogue to address risks and issues in the environment and on rights. And more importantly, it is clear that your organization is a partner to achieving the SDGs.
Finally, ESG will help make your company or organization future-proof and ready for life after this pandemic. The issues and challenges that the world faced before COVID-19 – environmental degradation, climate change, poverty, human rights abuses – will still be the same ones we all have to tackle and solve together. More so since these same issues have been aggravated in many ways by the pandemic. Your ESG principles and guidelines help ensure that you have the policies, tools, and skills in place to meet these challenges head on.
Ready for the Bumpy Road Ahead
The pandemic has changed the world as we know it, and things will definitely never be the same again. But it has also given us a unique opportunity to reset and restart our collective efforts at a more sustainable future – one that is inclusive, prosperous, and resilient for both people and the planet. ESG principles and guidelines help organizations on the road towards a more sustainable world. Bumpy as it may be, it’s a road we all have to take for our sake, and for the future world we want to live in and leave behind for the next generation.
Grip is a private legal practitioner and consultant based in the Philippines specializing in environment, climate change, and sustainable development law and adjudication. Grip advises on legal and regulatory matters to companies in construction, management services, and NGOs. He has guided clients on corporate registration, ESG and sustainability strategies, intellectual property concerns, compliance matters, litigation, special projects and commercial arbitration, among others. He is also one of Parabukas’ very first Fellows.
