We live on a planet with abundant life-sustaining resources. Still, how humanity has created and maintained its production and consumption standards means that today, we use approximately 170% of the Earth’s capacity.
Such behavior has produced a global warming never seen before, bringing disastrous consequences from an environmental and social point of view.
Connectivity and access to information have also exponentially increased society’s knowledge of the climate emergency we are experiencing and the need for change.
Climate change, pollution damage, social chasms, and governance challenges once locally experienced by communities are now universally shared, reinforcing the understanding that we can walk humanity’s path to sustainable success.
While governments and companies (large, medium, small, and individual), acting on the same supply and demand treadmill, aim for a successful future on a finite planet, a new plan to rethink the use of resources through a circular economy (environment), ensure value for people (social). Positive governance (governance) is becoming increasingly important.
Responsible and sustainable development lies on these three pillars: Environmental, Social, and Governance (ESG).
Several events and milestones in the sustainability theme, from the Sullivan Principles, with the economic boycott of apartheid in South Africa in 1977; the creation of sustainable índices and sustainable principles (PRI), to the determination of the UN Sustainable Development Goals (SDGs) and the Paris Agreement, as foundations to reach the current state of ESG.
The international network of UN-supported institutions works to implement the ESG principles for investors and support signatories in applying these issues to their investment decisions and procurement practices.
The United Nations General Meeting set global goals for the sustainable development of governments, businesses, and society.
The SDGs cover social and economic development issues, including poverty, hunger, health, education, global warming, gender equality, water, sanitation, energy, urbanisation, environment, and social justice.
The Paris Agreement was created in 2015 and signed by 196 countries to limit global warming to 1.5°C of the Pre-Industrial Revolution global average temperature and promote investments to achieve this.
These developments have led to more significant consideration of ESG in financial asset management, reaching a global volume of $35.3 billion by 2020.
The World Economic Forum, with its annual publication of the most likely and highest impact risks, has recently confirmed the trend of giving greater importance to ESG in economic development and sustainability.
