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Where Innovation meets ESG – An Intro

Updated: Dec 10, 2020



The title of the article is probably the most significant challenge facing Society today. Both Innovation and ESG challenge us as Individuals, as Governments, as Corporates, and NGOs.


The concepts here, and the growing Influence is vast. It seems everybody is talking about Innovation, ESG and Climate Change.


Both Innovation and ESG are positive opportunities to change the world for the better. Covid19 has taught us co-operation. more caring, more sharing is the way forward. This is the new frontier.


This article is an intro to some of these basic themes.


So, you ask - What is ESG and who needs to pay attention?


The leading Accounting firm PWC summarises this in an insightful way - For many, the term “ESG” brings to mind environmental issues like climate change and resource scarcity. These form an element of ESG—and an important one—but the term means much more. It covers social issues like a company’s labor practices, talent management, product safety and data security. It covers governance matters like board diversity, executive pay and business ethics. But as we discovered two years ago, there is a divide amongst stakeholders on how to manage and communicate it and what the term even means.


https://www.pwc.com/us/en/services/governance-insights-center/library/esg-environmental-social-governance-reporting.html#:~:text=For%20many%2C%20the%20term%20%E2%80%9CESG,product%20safety%20and%20data%20security.



There, are imbalances in the world. One notable problem is that top 10 or so richest people in the world own as much as 50% of the world poorest population. So, with in mind it is time to fix the imbalances in the world. For me ESG = Tikkun Olam which means repairing the world which is a key teaching of Judaism.


Let’s look at Innovation


We all have heard of the following terms – the 4th Industrial Revolution, Ai, Machine Learning, Big Data, Open Banking, Crypto, Blockchain, Digital Currencies, Digital, Cloud ..


All these Innovations is changing and is going to change more the way we conduct our lives. While there are many positives, there are many concerns.


1. Big Tech with too much power

2. Data Privacy and abuse

3. Money Laundering

4. Cyber Risks

5. Employments and skills retraining

6. And Others


So, with all these changes, we need a refreshed ethical code


So, we are seeing the rise of Impact / ESG


Let’s look at ESG


Environmental


Some issues – Zero Carbon Targets, Companies abusing the environment . Eg Coal, Factories pollution, New reporting guidelines , UN Sustainable Goals


Social


Some Issues - Treat your customer fairly, Customer Journeys ,Excess profits , Treat staff fairly ,Gaps between largest salaries and lowest salaries , Employees training and retaining ,Invest, support local communicates


Governance


There is drive for more Integrated approach in the way Companies are managed .

· Integrated Thinking,

· Integrated Risk Management

· Integrated reporting


Now longer will Financial Statements be about Numbers. Profits and Profits to the Share Holders, but will need to account to all Stake Holders- Customers, Staffs , Local Population and the Environment.


Let’s look at Covid19


Covid19 has the effect of driving Innovation in Digital solutions and Medical solutions. There is now a rush and need to bring in Innovation to overcome the challenges of Covid19. Covid19 has highlighted the fact we all in the same boat, the suffering of others, our need to co-operate more and not only be concerned about ourselves. In effect, it has brought the ideals of ESG to the forefront.


UN Sustainable development Goals


This is now a major platform of all ESG Approaches. Of this Climate Change is the number one short term and long term priority, and also is seen as engine of economic growth. Board Diversity is also gaining prominence, and many Companies and Boards recognise the need to include these Goals in their Business Guidelines. This is also a source of Opportunity as Companies that focus on the UN Sustainable Goals will not only receive higher ESG ratings, but Investment Opportunities.


Risk and Opportunities


We can see that the convergence of 4 trends that are coming to together to create positive change, Risk and Opportunities to the way we operate Companies in today’s world.


Call of Action


I am looking to expand my CFO and Directorship Portfolio and interested in Companies that want to make an Impact and create real change in meeting ESG


I manage the LinkedIn group - ESG - Invest for a better World - Environment Waste2Energy, Renewable Energy and Invite you to join the Impact / ESG Movement in making our world a better place - https://www.linkedin.com/groups/133378/


I blog and provide content writing on "where Innovation meets ESG" with a focus on Fintech, Crypto, Climate Change. and Health Tech


Please feel free to reach out to me by email jeffrey@persofi.com


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