A useful guide to how paying attention to the three crucial letters of the English alphabet E – Environmental, S- Social and G – Governance, can help stem ecological decline if not return planet Earth to its pre-human state. .
A star-studded disaster comedy film “Don’t Look Up” airing on Netflix these days is a timely reminder of the absurdity that has come to define the treatment of many serious issues with those in power preferring to let politics and polarization take hold. the step on good planning to prevent disasters. The film, based on a simple script, sends a powerful message about the dire consequences that result from the all too familiar political hesitations we see today on several global and local issues. The film is about an imminent end of the world with a comet rapidly approaching planet Earth. But the President of the United States, a role played by legendary actor Meryl Streep, urges his experts to simply “sit down and assess.”
Away from the garlands and glamor of Hollywood, it is not uncommon to see how nations are blinded by politics and polarization, under-prepared to face the looming dangers of climate change. But then there is help at your fingertips in the form of a very readable and well-referenced book – Outlast: “How ESG Can Benefit Your Business”.
Nothing less than a useful guide to how paying attention to the three crucial letters of the English alphabet E – Environmental, S- Social and G – Governance, can help stem ecological decline if not bring planet Earth back to life. his pre-human state. Dotted with examples, authors Mukund Rajan and Col Rajeev Kumar, wrapped in 368 pages a thought-provoking discussion supported by case studies that illustrate why companies and business leaders need to incorporate ESG into their business plans. .
In addition, time is running out and urgent action is needed. The just concluded Glasgow World Climate Change Summit sadly faced an inability to limit global warming to 1.5 degrees Celsius above the pre-industrial level, despite having set it as a target in the Paris Agreement of 2015.
The authors who expose the ESG mantra issue a worrying reminder: âA number of domestic pressure points are building up due to the dismal state of the natural environment in India. Whether it is air, land or water, the pollution generated by businesses compromises the sustainability of the natural environment “and they confirm this with evidence:” twenty-two of thirty cities the most polluted in the world in terms of air pollution are found in India. “
Harvard Business School professor Rebecca Henderson is right to say, âThe status quo is not a viable option. We have to find a different way to operate if our planet – and with it capitalism – is to survive. We need to move from a world in which environmental and social capital is essentially free – or at least someone else’s business – to a world in which the need to operate within environmental limits within a successful society is taken for granted.
To make this trip to the Indian context much more feasible and sustainable, the authors suggest several steps companies will need to take. Among them, a much needed quantum leap in the very modest R&D spending of Indian companies. Gross national R&D expenditure on science and technology as a percentage of India’s GDP, they point out, has remained stagnant between 06 and 0.7 percent over the past two decades, compared to China’s 2.1 percent of a high GDP. most important. and 2.8% by the United States and therefore perhaps rightly think that “this may well be the Achilles heel of Indian industry”. The other suggestion is to strengthen boards of directors with ideally a dedicated board ESG committee. But in the tight-knit business world, a real effort to create green credentials also requires greater moral clarity and an ethical culture. The authors therefore encourage a code of conduct, clear compliance expectations and enforcement mechanisms. To companies with global operations, the authors explain why standards cannot vary from market to market and that fundamental human rights and core values ââcan only endure when they are built into the code and respected. in supply chains.
They also favor the link between ESG performance and executive compensation. On climate change, the authors see a clear need for Indian businesses to prepare for urgent action although they see a silver lining and highlight commitments made by companies like Unilever, NestlÃ© and Reliance. This decision has been gratifying for those who want to get up to speed quickly. For example, Rajan and Col Kumar, both formerly associated with the Tata group and with a deep intellectual understanding of the different nuances involved, point out: Volkswagen is therefore scrambling to build cleaner electric vehicles. The first players in this space like Tesla … are now rewarded … “As of August 20, 2021, Tesla’s market cap was $ 673.47 billion, leaving General Motors at $ 70.84 billion and Ford at $ 49.32 billion. of dollars (both “industry veterans”) far behind. In fact, in October, Tesla’s shares were worth over $ 1 trillion, although more recently setbacks were seen following Tesla founder Elon Musk’s tweet about his intention to sell 10%. of his Tesla shares.
There are also other dimensions that the authors remind companies to be aware of to include ways to better engage with local communities and with employees and in the journey towards ESG improvement, a crucial element in measuring ESG parameters and monitoring performance on this front is also addressed. In tune with the title, the book concludes: âThe age of responsibility is upon us, and the companies that will outlast their competitors are the ones that will build resilience and prepare their businesses for long-term success through adoption. holistic of the ESG mantra.
Book Title: Outlast – How ESG Can Benefit Your Business
Authors: Mukund Rajan and Colonel Rajeev Kumar
Financial Express is now on Telegram. Click here to join our channel and stay up to date with the latest news and updates from Biz.