Why ESG is the Latest Buzz Word
05 March 2023
Environmental, social, and governance (ESG) factors are increasingly relevant to businesses worldwide. Companies are now evaluated on their financial performance and impact on the environment, society, and corporate governance. The ESG buzz is gaining momentum in India and worldwide, with businesses looking to incorporate ESG factors into their operations to improve their sustainability and reputation.
Decentralized technology drives the show in the ESG space by providing a transparent and secure way of recording and sharing ESG data. Owing to its inherent nature that makes decentralized tech tamper and fraud-proof, it is critical in the ESG space, where data accuracy and integrity are paramount. It also allows for the creation of peer-to-peer networks, which enables data to be shared directly between stakeholders without intermediaries.
TRST01 is creating a difference in the ESG space with its product Footprint, an ESG reporting tool that uses decentralized technology to enable businesses to collect, store, and share ESG data securely and transparently. The tool allows companies to track their ESG performance in real time, enabling them to identify areas for improvement and take corrective action.
Footprint also enables businesses to share their ESG data with stakeholders, including investors, regulators, and customers. By sharing ESG data, companies can improve their reputation and build trust with stakeholders, leading to increased investment and customer loyalty.
In India, ESG is more relevant than ever before. The Securities and Exchange Board of India (SEBI) has made it mandatory for the top 1,000 listed companies to disclose their ESG performance. This move by SEBI has spotlighted ESG factors and is encouraging businesses to take a more proactive approach towards sustainability.
In the international arena, ESG investing has become increasingly popular. ESG investments are investments made in companies that score well on ESG criteria, positively impacting the environment, society, and governance. ESG investing has gained momentum in recent years, with assets under management in ESG funds surpassing $1 trillion in 2020.
The ESG buzz is also gaining traction in the banking sector. Banks are increasingly looking to incorporate ESG factors into their lending decisions, and banks are now evaluating the ESG performance of borrowers before deciding to lend to them. This move towards ESG lending encourages businesses to improve their ESG performance to secure funding.
Be it for regulatory compliance or self-motivation to impact their business triple, bottom line positively, ESG is here to stay. Businesses that embrace ESG factors are likely to reap the rewards of improved sustainability and reputation.