As the global community begins rolling out vaccinations, discussions about what a post-pandemic recovery looks like are beginning to emerge. There is growing recognition that the world cannot continue as it has in the past, with the same social inequalities and disregard for the climate that have been exposed by the pandemic.
This is opening the way for leaders to prioritize ESG initiatives. The framework of what a new normal could look like is emerging and it is characterized by social equality, environmental awareness and agile governance.
For example, Pope Francis recently stressed the need for “sustainable behaviour, behaviour that ensures that the Earth is no longer used “as a storehouse of resources to be exploited.” In a new book released by the religious leader, he warned that if humanity does not “roll up our sleeves and immediately take care of the Earth, sooner or later our common home will throw us out the window.”
It was a stark reminder that the climate crisis still requires urgent attention. Therefore, leaders should foster environmental awareness throughout their organisations and embed that into their company ethos, if they haven’t already.
On the social front, Phumzile Mlambo-Ngcuka, the United Nations Under-Secretary-General and Executive Director of U.N. Women recently urged for a post pandemic world to more effectively address the “yawning gap between men and women when it comes to political leadership, and ensure women have a strong voice in rebuilding economies after the COVID-19 pandemic.”
Gender equality is not a new principle. However, there is clearly much that still needs to be done to further prioritize gender equality initiatives. For example, the gender pay gap in many industries needs to be closed.
With regards to governance, the World Economic Forum has highlighted the need for governance and regulations that enable innovation while addressing social and environmental challenges. Furthermore, it has stressed that “a more agile approach to regulation is needed, that seizes the opportunities of the Fourth Industrial Revolution whilst mitigating the risks.”
As to how leaders can actually prioritize ESG initiatives, some key actions:
The first of these entails embracing new collaborative measures. 2021 will bring continued opportunities for corporations to work with governments and individuals alike to rebuild and create a fairer, more sustainable future for all. This is not a new approach, with the public and private sector often collaborating to meet environmental or social outcomes. There are also partnerships between corporations and non-profits, where both have a vested interest in conservation, such as the one between Dell Technologies South Africa and the Elephants Alive project.
Being involved in such initiatives is good for business, building positive brand reputation, boosting customer engagement, and forging trust with stakeholders. Furthermore, prioritizing ESG initiatives that are socially or environmentally conscious helps them attract the best and brightest talent, who want to work for purpose driven companies.
Secondly, ESG leaders are encouraged to embrace Intersectionality, which recognizes that social concerns interweave with one another. For example, reducing poverty intersects with reducing hunger and cultivating fairer economies. Fostering gender equality also relies on reforming education.
Thirdly, ESG leaders are encouraged to embed ESG deeply into their own cultures, strategies, and missions. Rather than being a function within an organisation, prioritizing ESG initiatives needs to be part of the DNA of an organisation operating in the 21st century. Already, business leaders are moving in this direction, with 90% of the S&P 500 now producing ESG reports.
Finally, for those leaders looking for a financial reason to prioritize ESG initiatives and pay close attention to its impact, here is one: According to Morgan Stanley, ESG initiatives will likely define the next decade of investing. While the previous decade was dominated by the acronym for the big five tech stocks – FAANG – Facebook, Apple, Amazon, Netflix and Google stocks, it is ESG that is set to be the acronym that defines business success in this one.