Establishing a Responsible Corporate World through ESG Rating

Abstract

For a long period of time, corporates have focussed only on profit-making as the sole objective of all their pursuits. There was a lacuna in acknowledging the significance of sustainability in business processes. However, recent trends in global economy have suggested that it is not just the financial growth but also non-financial parameters which are important for ensuring long term survival of companies. ESG disclosures attempt to assess a company’s performance on such non-financial parameters covered under the broad categories of environment, social and governance. Workplace culture, employee safety, carbon footprints, ethical governance, waste and water management, community outreach, responsible marketing and many more are essential factors to determine a company’s true value in modern times. ESG scores reflect upon a company’s performance in these areas thus providing an opportunity to investors, employees, customers and other stakeholders to mindfully decide upon their association with a corporation.