The global economic and investment landscape has experienced tremendous change in the late 20th and the 21st centuries. The socio-economic and political atmospheres have been exposed to the forces of globalization. Globalization and liberalization have enabled companies and businesses to scale the heights in scoring wide profit margins. These changes in global enterprise dynamics have also necessitated the need for proper environmental, social and corporate governance structures in businesses. This dictates that as a business purpose to thrive in an environment, deliberate measures and practicum have to be embellished to ensure minimum environmental pollution; use of green energy and good leadership will attract investors.
Through environmental best practice businesses cut the total costs of production by; using innovative ways of energy conservation and less emission; recycling and /or re-using wastes and reducing pollution. In the social dimension, the human capital, labor rights and human rights are upheld. Through proper governance and leadership companies are able to steer their staff in the right direction and forge better Board-Investor relations. Combining Environment Social Governance and proper financial management is crucial for success as it inspires innovation and better resource utilization hence earning the company a competitive advantage over competitors.
Through initiatives like paperless offices, cloud backup and saving data, and automation businesses are able to reduce running coasts. This ensures better return on investment for the company. Most companies are under the impression that giving back to the community is tantamount to charity therefore giving huge sums of money in donation. This way the idea of social responsibility is lost. Proper social responsibility ensures protection of the environment for future generations. Just like vehicle accident insurance that protects the vehicle against future eventualities, sustainability is insurance for the future of the business against uncertainty.
Archibugi, D, J Howells and J Michie. Innovation Policy in a Global Economy. Cambridge: Cambridge University Press, 1999.
“The investment logic for sustainability.”Ted Talk,Chris McKnett, State street, https://www.ted.com/talks/chris_mcknett_the_investment_logic_for_sustainability