ESG is transforming businesses — slowly but surely

ESG reporting is being embraced by corporates worldwide.
ESG reminds that environmental stewardship, social responsibility and purposeful governance are now the remit of the entire human race.

An ESG-focused world: For 65,000 years, the human race learnt to adapt to the environment in which existence placed them. The cumulative learning was then put on steroids 200 years ago to give birth to the Anthropocene age.

Temperatures that had kept within a narrow, tolerable range started shooting up. In the 21st century, extreme climate events started the protest of nature, which was severely violated. Covid-19 struck in 2019 and has for the last two years dramatically altered our mental engineering. We learnt the hard way that the status quo ante was unsustainable.

As a race, humans discovered frameworks, platforms, standards, six capitals instead of one, collaboration, augmented intelligence, deep learning, robotics, IOT, sensor based, data led decision making, 3-D printing, and encapsulated all these learnings into a dazzling three letter paradigm — ESG.

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Embrace ESG for future generations

Environmental stewardship, social responsibility and purposeful governance are now the remit of the entire human race. This is indeed transformational. We are all on a steep learning curve and enjoying the ride that will make our only home, Planet earth , ready for our grandchildren. We cannot fail them.

Business will transform as the ESG lens is worn by all of us. We have already begun to be cloud natives, are adopting to circular economy imperatives, have become conscious about carbon and water footprints and therefore are investing in energy transition to renewables, have put safety, human rights and social and health security on our top agendas and have defined purpose, culture and values that should inform our next steps. I firmly believe that fresh investment in Coal will be muted and the death of the internal combustion machine is near.

We have realised the short runway we have and so are purchasing electric vehicles. Autonomous cars, ride sharing, digital payments, tokenisation, Central Bank Digital Currencies, and bitcoins all are engaging our attention. We found a vaccination against Covid-19 in 18 months, vaccinated at least half the human race and are on the verge of consuming a wonder drug that will keep viruses at bay.

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Immunity is back in adult consciousness. Health and education have ascended to the top agendas in almost every geography. We are rebuilding new infrastructure at scale and at unprecedented speed, with no- polluting materials or materials transformed by recycling. Read granules from hospital waste being converted to plastic reinforcement to roads and buildings. providing insulation or T-shirts from plastic waste. All huge transitions.

As we learn to democratise green Hydrogen, get to net zero grids and become energy abundant, we are also transforming land use, reconfiguring supply chains and decentralising manufacture, finance and services. All on automated platforms using digital internet at 5-G speeds and moving forward to 6 and 7 G. Almost magical compute and storage capability has been created and the journey to Quantum is on. Brain computer interfaces, ecosystem services, payments, accounting and Auditing and highly reliable data are emerging.

Every aspect of business is being reimagined and made more productive. We will have to rapidly learn to deal with stranded assets and non-flexible mindsets and put the entire human race into a new trajectory of deep and new learning to cope with this New World that we are creating. It is an exciting journey worth being on.

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Shailesh Haribhakti is a Chartered and Cost Accountant, an internal auditor and a certified financial planner. He is a board chairman, audit committee chair and independent director at some of the country's most preeminent organisations. He is a thought leader on the Indian economy and public policy.