Many companies as well as commercial, industrial and institutions, still ask questions about “why ESG?” Many simply view it as an additional administrative burden.
In this 3-part series, Sharon Myburgh sketches the development of ESG and she explores the question how an entity can deploy it to its advantage.
After all, this is a win-win for finances and Circular Economy, argues the Sustainomics executive responsible for carbon footprinting, energy audits and energy managements systems.
She has 30 years’ experience in impact assessments, more than 20 of which in consulting and has served on various boards as non-executive director.
Today the second instalment in this 3-part series on the evolution of ESG. Part 1 can be found HERE while the third series will be published tomorrow.
Triple Bottom Line
The phrase “Triple Bottom Line” was coined by John Elkington in his 1998 book “Cannibals with forks: the Triple Bottom Line of the 21st Century Business”.
The phrase refers to the interlinkage of concepts of Economic Viability, Environmental Sustainability and Corporate Social Responsibility.
The relationship between the Triple Bottom Line, values and ethics and principles, and corporate governance which is to ensure global survival can be illustrated thus:
Values, ethics, principles in fact describes the “character” of the organisation / institution or as some now describe it the “DNA” of the business.
The “character” of the entity will determine its governance and should wish to eliminate greenwashing.
The institutional dimension, is the “raison d’être” of the organisation, whether it be a product or a service.
The name of the game is Sustainability
In order for commerce and industry to become globally competitive and globally sustainable, it needs the commitment and buy-in of the micro-organisms that such commerce or industry consists of as well as its organizational “umwelt”, that is the stakeholders, beneficiaries, supporters and suppliers that form part of the organization’s sphere of influence.
Thus, the global business community also needs the commitment and buy-in of small business and educational and other institutions as participating organisms of global economy.
With all the new legislation that is being promulgated, and consequently the burden it places on the commerce and industry, it appears that, far from “levelling the playing fields” or “making the global economy more accessible to start-ups” the global game of monopoly is becoming increasingly exclusionist.
This also relates to technological advancements that make access to infrastructure and services such as energy and water unaffordable for lower income sectors of populations.
Scenario 1 below illustrates integration of the triple bottom line (the area colored in aubergine).
In Scenario 2 the overlapping areas of the triple bottom line is significantly larger, illustrating more integration than Scenario 1.
The scenarios 1 and 2 above illustrate both the importance of integration but also emphasise the importance of economic efficiency.
Without the integration of economic efficiency in the total package, the integration (and sustainability) is far less, as illustrated in Scenario 3 below.
This echoes the argument of Brechin, Wilshusen, Fortwangler and West, that one cannot implement sustainability from the ecological or social point of view only.
Tomorrow part 3 in this 3-part series on the evolution of ESG: Playing The Game. Part 1 can be found HERE.
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