World over we find over the three month from April to June '20, about $80 billion have flown into funds that care for the preservation of the environment. About $30 trillion assets across the world are defined and directed by Environmental Social Governance standards. It no doubt tells us that across the world, corporates and organisations are re-looking at sustainability and governance standards and guidelines to ensure a brighter future for the future generations that will inherit planet earth.
While going through the article in HBR of Jan '21 by Jennifer Grenville titled "ESG Impact is hard to measure, but it's not impossible" (click here), the author is trying to tell us how global interest and attention is bring directed to environment and sustainability aspects and how investors are putting their money into those ventures that care for the environment.But what should we really do in this case ?
1. Need to have measurable metrics - Anything that gets measured, gets managed. For example measuring the Carbon footprint was an effective way for countries to raise awareness of carbon pollution and measures to contain CO2 emissions are being carried out across the world with the help of International organisations like UN. . Even if we can list them there is a chance that it can get managed, eg. checklists. But if we do not list or measure the outcome, we are bound to fail miserable the war against environmental pollution.
2. Measuring the easily monetisable, but missing the valued - like reducing Carbon footprints and Carbon emissions but missing the more important dangerous impact of the manmade emissions on the ecosystem, the pollination enabling bees, the earthworms that aerate the ground, the algae that oxygenate the water and so on.
3. Announcement of global recognition - Elon Musk a week back came out with an all important announcement of a prize money of $100 million ( a Nobel Prize is just $2-3 million) for anyone who develops the best Carbon capture technology. This is bound to improve global research across academic institutions and research labs to find efficient ways of Carbon capture.
4. Zoom in closely in areas where concerns are being raised - For example, Nike violations of environment and employee welfare measures across the world led to Nike taking proactive action to save its reputation and at the same time the immediate environment and the lives of its employees across the world.
5. Zoom out for the bigger picture - As an illustration, HBR research shows that by 2030, world fresh water usage will increase by 40% due to increased urbanisation and population. By looking at the bigger picture we should be looking at new research that can reduce the usage of fresh water or increase availability of fresh potable water. Desalination or moisture capture technologies can definitely help in this regard. Similarly renewable energy generation, Carbon capture, effective waste treatment, responsible urbanisation etc are interesting areas to work on.
6. Looking beyond profit maximization to serving society - Most businesses globally are only concentrating on maximising profits unmindful of the environmental impacts of their actions. Instead organisations should look at the bigger socio-economic environmental impact to assess the situation well.
George..
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