Top 3 Issues in ESG for 2020
Environmental, social, and governance (ESG) rose to the forefront of business executives minds last year. Lots of new issues presented themselves, and it became a central focus for companies and investors around the globe. As we move ahead in 2020, it’s clear that ESG will become even more prominent. With that in mind, we’ve identified the top three issues in ESG to be aware of in the next twelve months.
One key trend is the shift in focus away from businesses themselves and onto their partners. Primarily, the main issue is supply chains. Your company will have various suppliers that provide you with the resources you need to conduct business. While your establishment may have a strong ethical standing and a transparent brand, your supplier might not.
This year, businesses need to pay more attention to the ethical conduct of their supply chains. Are you dealing with other companies that use ethical processes, or are they exploiting local workers in third-world countries? We’ve spoken about adjusting your supply chain in terms of managing ESG before. You need to make a change and ensure that your suppliers align themselves with your needs and values. Otherwise, there’s the danger of making a negative social and environmental impact through your supply chain.
Climate Change Policies
Climate change was a prominent ESG issue in 2019, and it doesn’t look like slowing down in 2020. The catastrophic fires across Australia have really thrown climate change into the public eye more than ever before. People are calling for changes to governing policies in a bid to prevent issues like this from happening again.
Governments are starting to listen, and this will lead to new policy implementations. As you can imagine, businesses will be hit hard by new regulations to try and curb their impact on the environment. Companies should also try and create their own policies to lower their carbon footprint and show and active interest in fighting climate change.
ESG innovation grew in the last twelve or so months. 2020 will see this trend continue as more and more innovative technologies are being produced. We’ve seen an increased demand for electric vehicles and low-carbon machines. Companies are looking to develop technology that improves the general infrastructure to allow things like electric vehicles to become more realistic and easier to own. There’s also a clear movement to commit to a low-carbon economy.
Alongside this, technology continues to advance in other areas as well. The increased scrutiny on the meat industry has led to innovations that produce meat-free products with a much lower carbon footprint. Then, there’s the idea of innovative technology to help streamline businesses and provide more automation. Expect to be faced with more and more ESG-driven innovation in the coming months.
These are the top three issues in ESG to look out for in 2020. It’s crucial that you pay attention to these things as you need to improve on all of these issues. Make a commitment to adjusting your supply chains and vetting your suppliers so they align with your company. Be active in the right against climate change – introduce your own policies and use your power to influence the government. Finally, be open to new innovations and technologies to help streamline your business and reduce its negative impact on the world.