Environmental, Social and Corporate Governance (ESG)

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Environmental, Social and Corporate Governance

Over the last decade, corporate sustainability, climate, and social changes are becoming more of a mandatory endeavor rather than a voluntary undertaking. Now more than ever, businesses and environmental, social, and governance (ESG) are more intertwined. Organizations that are embracing the ESG proposition are better suited to succeed in the competitive global market.

 

What is ESG?

ESG is an acronym for environmental, social, and governance. It refers to a stakeholder-centric approach in running a business. ESG outlines factors that determine an ethical and sustainable investment.

According to Financial Times Lexicon, ESG is a broad term that finds its application in capital markets. It comes in handy when investors want to evaluate corporate behaviors and use it to predict the financial performance of a business.

To understand the concept better, let’s break down ESG

Environmental

The environmental aspect takes into account how a business utilizes energy, natural resources, handles waste, and steps they take to minimize pollution just to mention a few. The criteria also examine any environmental risks a business might face and evaluates how it responds and manages them.

These issues include but are not limited to toxic emission management, disposal of hazardous waste, and how they maneuver in cases where they own contaminated property. A wise investor will always look for companies that comply with government environmental regulations.

Social

The social criteria examine a company’s business angle and the relationship it forges with the community. Some of the factors considered include but are not limited to whether they partner with businesses that hold the same moral ground as they claim to do, and the effort they make to give back to society.

A socially conscious company should also give priority to its employees’ safety and health. It should consider the interest of its stakeholders and encourage its employees in participating in voluntary community work for the betterment of society.

Governance

The governance criteria examine how a company runs its operations. The investors expect the business they wish to be part of to use transparent and accurate accounting methods. The criteria also try to determine whether stockholders are given a say in a company’s important decisions through voting.

Investors utilize the governance aspect to get assurances that the business is more than capable to avoid conflict of interests when it comes to choosing board members. More importantly, the company should not be engaging in anything illegal or use political contributions to solicit undeserving favors.

Why Environmental, Social, and Governance is Important?

After a devastating pandemic year, investors now understand sustainability is not just about handling environmental risks, but also other unforeseen factors. The creation of a resilience ESG infrastructure is now of the paramount essence.

In the recent past, investors have witnessed an elevated ESG and consumer attention towards the impact of businesses and corporations. This scenario has steered them to go for companies with strong ESG proportion to safeguard their interests when investing.

According to the US Securities and Exchange Commission (SEC), ESG issues will be their top priority and will play a great role when they are making their decisions. SEC postulated that the line between profitability and good doing is fading fast, and that’s why there is a need for efforts to pursue public interests while maximizing the bottom line in the US.

Elsewhere, European Green Deal is targeting to help all member states achieve a net-zero emissions by 2050. They also want to achieve circular economies by then.

What does this Mean for Companies?

Many nations have embraced regulations such as implementing carbon taxes and money lending institutions have initiated ESG rules into their funding processes. Due to the scenario, many companies have already started feeling the impact of financial consequences.

For stakeholders to mitigate the effects that come with poor lending conditions, they must prove they have robust ESG strategies in place. Investors across the globe have discovered settling for businesses with effective ESG strategies, is a precursor to improve their ROI and it also reduces revenue risks.

Terracom Versus Corporate Sustainability

At Terracom, we are an environmental and socially conscious company that is committed to ESG strategies for the betterment of our company. Our internal corporate solutions that minimize the need for paper such as QR-Patrol, MyloneWorkers and και LiveAll.eu are tailored to meet the green standards that are acceptable by all countries.

All our solutions are hosted in green data centers that employ energy-efficient technologies a scenario that has helped us to reduce our carbon footprint.

Terracom is constantly following an ESG strategy during many daily routines: recycling batteries, minimizing paperwork by using advanced software solutions, protecting devices through UPS systems, and following green tactics within our central buildings and offices. We are also at the forefront to learn of new ESG strategies and any suggestions pertaining to social and corporate governance are welcome!

About Us

We are providing top-of-the-shelf IT services and innovative products. Customer satisfaction has always been our ultimate goal. Our reputation across the globe is incredible and we are always equipping ourselves with new technology to offer satisfactory services. We are a company that believes in social corporate sustainability.

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