Sustainable investing in Africa must place priority on the social aspect
ESG has tended to emphasise the environment and governance while playing down the impact on communities
The concept of environmental, social & governance (ESG) entails three factors that have been overlooked in measuring firms’ compliance with these criteria. Environmental responsibility speaks to energy usage, carbon footprint and waste management systems. Social responsibility refers to the relationship between companies and labour, and the firms’ commitment human rights, diversity and inclusivity. Governance is generally restricted to corporate governance in the form of business ethics and involving shareholders in business decisions, and a commitment to transparency. This is essentially the definition of ESG presented by Goby’s ESG Reporting Matrix, and Social Intelligence’s exploration of ESG frameworks.
ESG reporting has become increasingly mainstream since the concept first took root in the 2000s. Instrumental was the launch of the FTSE4Good Index Series, whose objective was for UK pension funds to consider social, ethical, or environmental (SSE) issues in making ...
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