In recent years, we have seen environmental, social and governance (ESG) considerations rapidly rise up the agenda for businesses and investors.
The Covid-19 pandemic will only brighten the spotlight further, particularly in relation to whether businesses are behaving in an environmentally conscious way, considering their wider social impact and demonstrating good governance.
Whilst the lockdown has many serious impacts, one positive to take is the environmental side effects. ESG-conscious investors will be mindful of avoiding a rebound to polluting habits in the name of economic recovery and company boards can also expect to be challenged on learning from the Covid-19 crisis.
Following the unprecedented government support available to businesses during the lockdown, we can expect to see increased scrutiny from investors, consumers and the media on companies social impact, particularly in relation to tax transparency and compliance, incentives and remuneration for senior management and the treatment and wellbeing of staff.
Governance is the mechanism by which companies are judged on their adherence to expected standards of behaviour. There is little doubt that the bar of these standards will increase and have wider applicability as the lessons from Covid-19 on the importance of resilience are learnt.
Our team of experts can assist in navigating the challenges and opportunities of ESG.
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