ESG is important for several reasons. First, it helps identify and manage risks and opportunities associated with environmental and social issues, such as climate change, biodiversity, water, pollution, product end-of-life management, labour practices, and human rights. By addressing these risks and opportunities, companies can enhance their long-term sustainability and avoid potential legal, reputational, and financial consequences.

Second, ESG factors are increasingly considered by investors, lenders, potential new staff and other stakeholders when making decisions. Demonstrating a commitment to ESG can attract capital and talent, improve access to funding, and enhance a company’s valuation and reputation.

Third, ESG aligns with growing societal expectations. Consumers, employees, and communities are increasingly concerned about environmental and social issues, and they favour companies that prioritise sustainability, diversity, and responsible practices. By embracing ESG, companies can foster trust, loyalty, and positive relationships with their stakeholders.

In summary, ESG is a comprehensive framework that helps companies manage risks, identify new opportunities, attract capital, and align with societal expectations. By integrating ESG principles into their strategies and operations, companies can enhance their long-term success and contribute to a more sustainable and equitable future.