ESG and Compliance

By Reinushini Chandrasegaram, MACD Chair of Professional Development

The intersection of ESG and Compliance

Environmental, social, and governance (ESG) refers to the three central factors in measuring the sustainability and ethical impact of an investment in a company or organization.

Compliance refers to following regulations and laws, as well as adhering to industry standards and best practices.

The integration of ESG considerations into the investment process has gained significant momentum in recent years, as more investors and consumers are seeking to align their investments with their values.

This has resulted in increased pressure on companies to demonstrate their commitment to ESG issues, and to be transparent about their practices and performance.

Compliance with regulations and industry standards is a critical component of ESG, as it helps to ensure that companies are acting in a responsible and sustainable manner.

This includes complying with environmental laws and regulations, such as those related to emissions and waste management, as well as labor laws and regulations that protect the rights of employees.

In addition to compliance with regulations, companies are also expected to adhere to industry standards and best practices in areas such as corporate governance, human rights, and ethical sourcing.

This can help to ensure that companies are operating in a responsible and sustainable manner, and that they are mitigating potential risks and reputational damage.

In conclusion, ESG and compliance are closely intertwined, and companies that prioritize ESG considerations and comply with regulations and industry standards are likely to be more attractive to investors and consumers, as well as being better positioned for long-term success.