ESG is not just a business buzzword but is a gateway to new frontiers of change. ESG has become the foundation of future business strategies. Today, most customers are looking at the ESG value proposition of companies they buy products and services from. In a post-pandemic world, business resilience can be better achieved with a robust ESG framework.
Stewardship in the 21st century is centered around a value-driven purpose, that promotes health and wellbeing by dissolving systemic inequalities to build companies that are more equitable, diverse, and prepared. Corporate stewardship is inextricably linked to responsible capitalism, collaboratively building resilient corporate cultures that ultimately impact a broader stakeholder base and manage the accelerating changes faced by companies from ESG perspective.
Boards need to pay more attention to addressing various environmental, social, and economic challenges. New initiatives will continue to alter the regulatory landscape and define the role of the company in society. Boards need professional development and competency focused on bringing ESG, climate, and sustainability insights to Boards, investors, and executives globally.
Having an ESG oversight is important to provide effective oversight. ESG integration requires leadership and an ESG transformation mindset. Today we are not only transgressing the planetary boundaries, but also social and cultural ones. Technology has provided an opportunity for people to be more connected.
The world is becoming hyperconnected, automated, and uber smart, and everyone benefits. Six billion people are always ‘on’ around the planet, each of us seeing different information and content all the time. By 2022 our digital egos have moved to the cloud, and are developing a life of their own.
The focus on ESG is a consequence of the need for building better business ecosystems and bringing greater resilience for the future. Thus, sustainability reporting with a focus on ESG issues is the need of the hour, as it can help organizations to measure, understand and communicate their economic, environmental, social, and governance performance.
In the evolving ESG landscape in India, corporates need to prepare their own roadmaps for best-in-class approaches and practices for ESG governance, and integration, and evolution and convergence of reporting standards. However, there must be connectivity between the financial and the so-called nonfinancial reports. There is an urgent need to improve the comparability in ESG reporting, which can be achieved through a consistent global framework.
Internationally accepted reporting frameworks such as GRI, SASB, TCFD, IR, and IFRS are presently in the process to standardise and integrating these into one ‘Financial & Sustainability Report’.
The lasting impact of the pandemic has taught us that the future of work is ‘hybrid’. This calls for operational resilience. Given the advantages of a hybrid environment of improved productivity and increased happiness index, a growing number of organizations are moving to hybrid workforces. We need clear ground rules that foster a culture, where everybody feels included, regardless of where they are located. Companies need to train on topics such as building resilience, effective communication, time management, and diversity to drive behavioral change across broad segments of the workforce, making even remote employees feel seen and valued.
Boards continue to reshape and develop path-breaking multiple stakeholder customer-centric dynamic strategies to embrace robust data technology platforms, with digital cloud-based cutting-edge market solutions. IOD, which never stands still, has continued its efforts to support the directors by developing timely and relevant knowledge through new and updated training programs.
The foundation on which our global economic systems and governance practices have been built is nearing expiry. The technology in the next 20 years will bring in more change than in the previous 200 years. Technology is well on its way to becoming a creative force – and a thinking machine, as well.
As global conditions come to normalize in 2022, we enter a period of great reset – for which the Board of Directors needs to be prepared. A future-ready Board will need a culture of continual learning and strategy adaptation, in order to meet growing expectations for extraordinary Board- level stewardship in the 21st century.
