The past few years have seen a rapid acceleration in the ESG agenda being taken up by leading organizations across the globe. The key trends which have been observed spanning across multiple sectors include:
Embedding ESG in business operations
Notwithstanding the worldwide disruptions, including the global pandemic, which led to major economic and societal shocks, investments in ESG funds have continued to increase massively and are predicted to soar more in the coming decade.
Responding to climate change
COP26 has provided the impetus for policymakers and businesses to address climate change issues on a priority basis. While environmental concerns have not been traditionally the top priorities for the market, the renewed focus on environmental initiatives by leading countries like the EU, the US, and the UK has changed the dynamics of how stakeholders will respond to climate change issues in the years to come.
It is crucial for businesses and investors to embed responsible business practices in their operations. This has gained greater significance with many jurisdictions across the world coming up with ESG reporting and disclosure regulations to make the corporates more accountable.
Shifting consumer preferences
The millennial population is becoming increasingly aware of the environmental and social issues that exist in society. It will not be surprising if the next generation goes so far as to boycott products and companies that are not founded on ESG principles.
Protecting human rights
Instances of discrimination, inequality, and racism have increased manifold in the past few years. Businesses have come under major scrutiny, not only from legislators but also from the civil society. Businesses have started adopting and placing greater focus on diversity and inclusion programs in order to remain socially relevant.