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Accelerating the adoption of better values

admin2022-07-318

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Adopting circular economy thinking with a view towards restoring and regenerating the environment will help organisations ensure that environmental and social sustainability are embedded in all stages along the supply chain in the production of goods.

Global focus drives rapid development in ESG approach and trends

EMERGING from the aftermath of the Covid-19 pandemic which has imparted harsh lessons to people all over the world, global sentiments on bringing about a sustainable, responsible future are stronger than ever.

Rapidly developing in tandem is the approach towards environmental, social and governance (ESG), leading to the emergence of new trends driving the ESG space in 2022.

“Over the last two years, market commentators’ concerns about the Covid-19 pandemic derailing the global ESG momentum turned out to be misplaced as the pandemic’s widespread disruption to the global economic and social fabric has affirmed the need to prioritise sustainable, inclusive and green growth,” said Sunway University economics professor Prof Dr Yeah Kim Leng, who is also a senior fellow at the Jeffrey Sachs Centre on Sustainable Development.

“The pandemic has focused attention on the ‘social’ dimension not only in national recovery and rebuilding strategies, but also among institutional investors and the corporate community, thereby placing the ESG mandate firmly centre-stage in complementary national development and business policies and strategies.

“Overall adoption of ESG-driven approaches in investment, financing, business reengineering, supply chain reconfiguration and organisational cultural change will continue to intensify along with the development of global standards.”

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Focus on climate change

Of core importance is climate change, which has emerged as the top concern within the ESG agenda.

The 2022 United Nations Intergovernmental Panel on Climate Change (IPCC) report paints a troubling picture of climate change as a threat to human well-being and health of the planet, as it declared the need to drastically reduce greenhouse gas (GHG) emissions within the next three years to avoid the worst impacts of climate change.

The world faces unavoidable multiple climate hazards over the next two decades with global warming of 1.5°C.

Closely tied to climate change, biodiversity loss is among the biggest threats to human well-being and health of the planet.

Exceeding this warming level would result in additional severe impacts that can be irreversible. These include the quick escalation of risks in areas such as biodiversity loss, drought and floods, as well as food security, among others.

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