What is ESG?
Environmental, social, and governance, or ESG, refers to components of a sustainable, ethical, or responsible investment.
Investors use it as a general phrase in capital markets to assess corporate behavior and forecast the future financial performance of businesses. Investors are using these non-financial aspects more frequently as part of their analytical process to spot important dangers and expansion prospects.
Types of Environmental, Social, and Governance (ESG) Criteria
ESG investors want to make sure the businesses they fund are decent corporate citizens, accountable managers, and responsible stewards of the environment.
Environmental
Corporate climate policy, energy use, waste generation, pollution, preservation of natural resources, and treatment of animals are a few examples of environmental criteria. The criteria can also be used to assess any potential environmental ca business may face and how it addresses those risks.
Direct and indirect greenhouse gas emissions, toxic waste management, and adherence to environmental rules are only a few things to take into account.
Social
The company’s relationship with stakeholders is examined by social standards. How the company is affecting the society is the key factor to determine the company’s philosophy.
Does the business encourage staff to volunteer in the neighborhood or donate a portion of its income there? Do working circumstances demonstrate great regard for the health and safety of employees?
For example, an investor will be happy to invest in an organization that is actively working in uplifting the local community. May be helping in the development of local community centers, libraries, schools, and so on.
Governance
ESG governance ensures that a business employs correct and open accounting practices, selects its executives with integrity and diversity in mind, and is answerable to shareholders.
ESG investors always look for an organization that chooses board members and top executives who are committed to doing their job without showing any partiality towards anything.
Pros and Cons of Environmental, Social, and Governance (ESG) Criteria
In the past, it was believed that socially conscious investors sacrificed part of their interests by avoiding certain investments due to non-financial factors.
More recently, some have claimed that ESG standards, in addition to their social value, have also helped them in investing in organizations that are fully committed to their social responsibilities and are accountable for their actions.
How Businesses can take ESG Approach
When it comes to sustainability in India, there have been 2 events. First, the Companies Act of 2013 made mandatory Corporate Social Responsibility (CSR) reporting and spending, the world’s first such initiative. Second, the Securities and Exchange Board of India (SEBI) mandated the Business Responsibility and Sustainability Report (BRSR) for the top 1,000 listed companies by market capitalization.
The BRSR, which went into force on April 1 of this year, is anticipated to result in the creation of an index for businesses’ business responsibility and sustainability inside the nation’s still-under- construction ESG framework. The BRSR is a great place to start because it requires disclosures on significant ESG opportunities and risks, as well as their financial impacts and risk management. The moves India is taking to create a robust ESG framework are consistent with global trends.
There are five distinct guiding principles—ones that are supposed to remain constant—that could help businesses ace their ESG game, even though ESG regimes are always changing among nations, authorities, and industries:
Go Beyond Environment
Develop Tools for ESG Data Management
Prepare for ESG Reporting
Measure and Manage Emissions
Use ESG Communication for Business Edge
ESG by Natural Power
Being a solar company, working toward climate change is our primary task but it’s not like we only do the solar work. We do a lot of CSR projects as we believe it’s our responsibility.
Pulwama Vann project
As a part of the Pulwama Vann project, Navitas Solar is working to plant 40,000 Miyawaki trees to create a dense forest. In collaboration with Forest Creators, this project is being carried out in Gujarat’s Umbergaon district in the Kalai hamlet. The initiative is being carried out to honor the 40 Indian troops who lost their lives in the Pulwama Attack. One thousand trees are being planted for every soldier. For the plantation effort, 40 different native tree species have been chosen, and Navitas Solar has already planted 5,000 trees.
Jyoti Initiative
To raise awareness among young students about the environment, sustainability, and carbon neutrality, we approach various schools and colleges and present a lecture on “Sustainability-A Path for the Future.” Our goal is to educate the younger generation so they can use the resources of the environment wisely and grow up to be responsible citizens. The JYOTI initiative was started
