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What sustainability-driven investors consider in firms
A worker loads coal onto a truck at Sanyuan Coal Mine in China in January 2010. The proposed Lamu Coal Power Plant in Kenya suffered a set back due to its biggest financier, the Industrial and Commercial Bank of China, pulling out of the project citing environmental and social risks. PHOTO | FILE
Energy and infrastructure projects have for the longest time attracted the attention of environmental, social and governance (ESG) regulators and watchdogs. More recently, however, ESG concepts have gained prominence in almost all other sectors of the global economy as boardrooms all over the world move to integrate ESG principles in their decision making.
The ESG acronym has been freely bandied about, but what does it really mean? Simply put, ESG is an umbrella term encompassing a wide range of standards through which investors assess the impact of a project or company’s operations on environmental, social and governance outcomes, with a view to driving capital towards sustainable investments.
