Environmental, Social and Governance (ESG) approaches have fundamentally restructured financial investment over the past 20 years. However, the effectiveness of ESG approaches is difficult to measure, hampered by a lack of strict, regulated, and unifying disclosure framework. Accusations of ‘greenwashing’ – claiming an ESG approach without any meaningful action, have become more frequent.
The proliferation and complexity of ESG reporting has led to a
lack of auditing practices, comparability, and trustworthiness in ESG
disclosures. Despite more companies
claiming ESG approaches, global emissions and social inequity are rising. So
are ESG approaches even working? How can we measure their effectiveness?
What are ESG Approaches?
ESG approaches are business and investment strategies that
factor environmental considerations such as decarbonisation, social
considerations such as labour rights, workplace standards, safety and
diversity, and governance considerations such as transparency and minority
shareholder rights.
