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TECHNOLOGY REPORT

Making sense of ESG

S tanding for ‘environmental, social and govern- emissions consultancy, outlines, the report linked bet-

ter corporate performance with sustainable practices.
ance’, it is a set of standards that helps them
He says that “the social and governance parts of ESG
measure their impact on society, the environ-
The world is full of ment, and how transparent and accountable are pretty straightforward for our sector, especially
acronyms and the lat- they are for their actions. given that the majority [of firms] are SMEs”. But adds
est appears to be Some suggest that it has had its day and that “in 2024 the environmental part is the area that
ESG, a framework that, as the World Economic Forum (WEF) commented attracting a lot of attention from customers, govern-
that guides busi- in the summer, “ESG investing is going through a tough ments and NGO’s. This is where progress is needed”.
patch, attracting criticism from many sides”.
nesses and organisa- It cited an example when it wrote that “BlackRock Why ESG is considered good
tions in their boss Larry Fink said he will no longer use the term ESG has risen in importance because, as Harris com-
governance. ‘because it’s been entirely weaponised by the far left and ments, “companies that focus on ESG are often better at
weaponised by the far right’ [and that] many took this as identifying and managing risks, whether related to cli-
Words by a sign that investors had moved on, that ESG was just a mate change, regulatory changes or social issues, lead-
fad after all.” ing to greater long-term stability”.
Adam Bernstein
However, not all think along those lines and indeed, In his view, strong ESG practices can “enhance a com-
WEF considers the fundamental drivers of ESG pany’s reputation, build trust with customers, investors,
“stronger than ever.” and stakeholders, which can lead to increased customer
The term first came to the fore in a 2004 report from loyalty and brand value”. Moreover, he reckons, many
the United Nations, Who Cares Wins, that carried what investors now prioritise ESG criteria, believing that
is widely considered the first mainstream mention of “companies with good ESG practices are more likely to
ESG in the modern context. Importantly, as Dominic outperform over the long term”.
Harris, co-founder and director of CarbonQuota, an Beyond that, he says that it’s been shown that ESG

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