The Digital CFO

  ESG isn’t a new concept but it has gained more importance in recent years due to its acceptance. ESG has become a key developmental metric for both investors and clients.  ESG rating shows how an organization is doing on key developmental metrics. It stands for Environmental, Social, and Governance, and it is expected that every organization must perform well on these metrics. You will get investments based on your performance of these factors.  If you don’t know what these metrics are, then this article could be an eye-opener for you.  The first factor is related to Environmental and it is expected that you should play a role in keeping the environment safe. And you can do so by switching to clean technology. Also, you should try reducing your carbon footprint by controlling your energy consumption.  The second factor is related to Social and in the context of an organization, it stands for attracting talent and providing everyone equal growth opportunities. The focus has to

Investors are looking for your ESG Reporting instead of balance sheets. You pay your taxes on time. Also, you give benefits to your employees and investors and you share data to prove that you are doing good in business. But investors want to see more than what you show.  First, is the environment….  You know that the environment has become polluted and that it is profit-making companies that work without caring for the planet. For example, take a manufacturing company that uses chemicals that are harmful to nature. It could be a growing business, but it isn’t good for the planet.  Your ESG measurement of the environment would be lowest if you are exploiting nature for profit. You could be doing well on the finance factor, but your environmental rating would be the lowest. And investors are favoring businesses that are eco-friendly.  The second is social….  You have a business where you have employees that work for your profit. Do you share profit with the employees? Do you prov