In 1987 the United Nations Brundtland Commission defined sustainability as:
“meeting the needs of the present without compromising the ability of future generations to meet their own needs.”
In September 2015 world leaders at the UN Sustainable Development Summit adopted 17 sustainable development goals (SDGs). The aim was to achieve them by 2030. These SDGs serve as the blue-print of the UN's global agenda. Goal 13 is to “take urgent action to combat climate change and its impact.”
Whilst the UN remains the key global development body, there is an increasingly awareness and appreciation that private enterprises have a key role to play in achieving the SDGs. Cue the rise of Environmental, Social and Governance (ESG).
ESG provides a blue-print to assess the performance of entities, industries and governments in relation to the three over-arching mega-topics of Environment (for instance, carbon footprint, sustainability of manufacturing practices), Social (such as the human rights of workers in the supply chain, diversity and harassment) and Governance (transparency in executive remuneration, corruption and anti-bribery, etc).
ESG has also become a useful mechanism through which entities, industries and governments can be measured in relation to their contribution to achieving the SDGs, and to which investors can look to when analysing the long-term sustainability of investments.
Interested in ESG? Have a look at my ESG Insights page, featuring some commentary on topical issues.