Companies are interested in ESG because they regard doing it as good for their business. Let me elaborate on this.
People who are also customers are beginning to understand that climate change is triggering extreme weather events. That is affecting the lives of common people. The heat waves, the extended flooding of coastal areas, excess rain, and droughts are all scientifically validated to global warming. It is triggering the demand to move to use energy sources that do not emit GHGs (greenhouse gases). The entire energy-producing and consuming business segments are getting affected by this. As everything requires energy, its transition to greener sources impacts the global economy.
Improved communication is driving the exchange of knowledge. Societies are beginning to understand that social justice like gender justice, ending racial discrimination, and equity is values we should all strive to achieve. It is another trigger driving businesses and brands to adopt business practices that support these values.
Internal governance of business, to my mind, is another imperative that supports business performance. If you were to scan the business landscape, you would notice that companies with quality governance have adopted high human resource management standards, have a humane approach towards society, are customer-centric, and tend to perform better. These are sustainable businesses.
Climate change and business opportunities