Sustainability is a strategic imperative for companies
Sustainability is a strategic imperative for companies - not only to position themselves for the future and remain compliant in the face of increasing regulations - but even more pertinent, to help shape the future we want for our children and future generations. Trailblazers are currently exploring circular and even regenerative business practices and business models to enable this going forward.
ESG, however, is, in its essence, an investor risk minimization tool to create transparency and safeguard investments from risks in the environmental, social, and governance fields. It is designed to help investors reduce risk - not to build a better future. Still, it's a step in the right direction.
The latest McKinsey Global Survey on environmental, social, and governance (ESG) issues asked more than 1,100 respondents in more than 90 countries how their organizations are rising to this challenge.
Survey respondents reported that their organizations are not just paying lip service to ESG: many say their organizations are making meaningful ESG changes with demonstrable benefits and that their organizations focus on both protecting and creating value (for their organizations).
Seven traits that McKinsey concludes about ESG leading organizations:
1. Sights set on growth (rather than compliance)
2. Board directors and senior leaders who connect with external stakeholders
3. Prioritization of strengths that matter to stakeholders
4. An ESG leader in the C-suite
5. A central team
6. Purpose embedded throughout the organization
7. Incentives tied to ESG metrics
More in McKinsey's report >>