We call this emerging dynamic, which connects financial disclosures more closely to ESG and indicates the innovation of additional disclosures ahead, “FESG+.” By adding in elements that positively differentiate themselves from others they are pushing to be more attractive to investors, employees, consumers and others. While it is easy to characterize this as a one-way flow of increasing demands on companies to disclose more, it is also true that leading companies are embracing a broader vision of ESG to set out their unique narrative and to drive innovation. It also needs flexibility and a forward-looking element because future investors and other stakeholders, including governments and regulators, appear set to continue their demands for more information to be disclosed – with new relevant metrics appearing over the horizon at a greater pace than we have ever seen before. This will help businesses to rethink how they use ESG to inform strategic choices, drive innovation, and articulate how they’re creating long-term value. There needs to be a stronger connection between the “F” of financials and ESG - “FESG” - otherwise the true costs and opportunities of business aren’t properly measured. ESG needs to mature to have the same level of rigor and relevance as financial disclosures and to better demonstrate the economic impact of different ESG strategies and targets. For each of these stakeholders, ESG is already helping - but it must evolve more quickly as appetite grows amongst investors to make more precise decisions.
0 Comments
Leave a Reply. |