Future ESG trends

Despite entering the corporate vocabulary in early 2004, the term ESG (Environmental, Social, Governance) has remained invisible for more than a decade.
However, with the intensification of the topic of global warming, ESG has become a big part of the discussion and a star determinant for today’s companies. The concept of ESG could be seen as a set of standards that unites the most important issues in the process of implementing the principles of sustainable development, i.e., respecting the criteria that companies use to increase the ethics of their operations. National and international regulatory bodies have begun to evaluate and implement a range of practices related to sustainable finance, focusing primarily on possible ESG access and marketing to investors.
Since the nature of the topic is diverse, it is natural that different interests of companies and governments around the world pursue different agendas and, of course, question the overall effort. The difference between countries around the world will make it difficult for global companies to set their own ESG agenda while also complying with the different local regulations of the countries in which they are located.
The “Environment” part of ESG remains a priority, because climate differences are increasing, and decarbonization at the micro and macro level conditions the further development of the economy. In addition to climate change, a topic within the “E” part that will be interesting to follow is the topic of biodiversity protection.
For this year, it is predicted that the most attention will be paid to the now neglected “Social” part of ESG. By this we mean the issues of equality of wages, work, early participation in management committees.
“Governance” in ESG refers to the governance factors involved in decision-making, from policy-making to the distribution of rights and responsibilities among various actors in corporations, including management and stakeholders.

Investors looking at an ESG-oriented company will want to ensure that its accounting and reporting systems are reliable and transparent. Also, investors will evaluate how the firm treats its shareholders, as well as their ability to vote on important issues; they will also want evidence that the corporation is not engaging in illegal activities.
In summary, the ESG trends that should be followed this year are related to the further development of ESG regulation and reporting standards on the national and international market. The development of this trend is driven by individual companies that will have to be more transparent regarding the actions taken and the final results.

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