ESG….Environmental, Social and Governance – but what does it actually mean? Broadly speaking ESG refers to the examination of an organisation’s environmental, social and governance practices.
For Higher Education Institutions, much of this is not new. The aspects of ‘Environmental’ and ‘Social’ are; however, more recent additions and guidance around the expectations of the sector here are still forming.
ESG first captured our attention back in 2005 when an unsponsored report – Who Cares Wins: Connecting Financial Markets to a Changing World argued that embedding ESG considerations into capital markets would lead to better societal outcomes.
Whilst the basis of this report was primarily concerned with ESG in relation to investments, the concept has grown exponentially, with organisations placing ESG front and centre of their strategic planning processes and board conversations.
The use of ESG ratings are becoming an increasingly common method of being able to progress and report on the improvements being made. In March 2023 the UK Government through HM Treasury launched a consultation process to consider whether regulation for providers of ESG ratings should be introduced and on the potential scope of a regulatory regime.
ESG is now big business and there are few organisations who have not yet considered ESG, its impacts and how it will respond to the increasing need to demonstrate positive action in this space.
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