THE GLOBAL business environment, though showing encouraging signs, nonetheless remains precarious and local companies must do everything they can to remain competitive and to attract the investment needed to expand their reach.
One aspect of this was brought home strongly last month at a special one-day workshop hosted by the TT Chamber of Industry and Commerce on the theme of environmental, social and governance (ESG) management.
ESG is a measurement framework designed to be included within a company's ethos so that it considers a wide range of needs and values for all organisational stakeholders. It has several dimensions.
There is an environmental aspect, where data is reported on things like greenhouse gas emissions, deforestation, pollution mitigation and water management. How many tonnes of carbon is a company emitting? Is electricity usage being tracked?
Another aspect is social, relating to employee health and safety, working conditions and diversity. For example, is there gender parity within the organisation? Is it aligned to national demographics in a way that suggests equity and inclusion?
The third aspect is about governance, involving issues such as whether a company has adequate safeguards to prevent things like bribery and corruption.
Investors are increasingly looking at such things within their portfolio philosophies, using them as part of their evaluation of whether a business is right for them.
And consumers are increasingly demanding assurances from manufacturers and service providers that such factors are being taken into consideration.
All of this in the wake of the UN's move to get business to overlay data with sustainable development goals as well as amid increased sensitivities globally to the ways businesses impact and influence society.
And yet, somewhat dismayingly, there's no universally-accepted standard in force when it comes to transparency about ESG practices, which will vary not only from company to company but also sector to sector.
They should be one.
According to Marcus Jardine, associate partner at Ernst and Young, one may be forthcoming, with the plan for the establishment of the International Sustainability Standards Board, established in 2021 at COP 26 in Glasgow after lobbying from several global entities.
In the meanwhile, however, there is currently a somewhat scattershot approach to data collection and reporting, with there being, according to Mr Jardine, as many as 600 different bodies to which ESG practices can be disclosed.
'You have this regulatory fog where people are unsure in terms of what does 'good' look like,' he said. 'How do I know if I am getting better? How do I know if I am even doing or recording what is meaningful to stakeholders.'
The Central Bank's recent warnings of potential spillover effects of the US banking crisis, as well as the dip in profits reported by companies such as the Ansa McAl group underline why ESG must be attended to at t
