ESG and Sustainability: International Trends and European Drivers

Environmental issues are likely to be the biggest sustainability issue facing companies over the next decade. These days companies are increasingly expected to play a lead role in addressing environmental, social and governance (ESG) issues that have traditionally been the preserve of governments.

The most resilient companies have embedded sustainability into their business models and decision-making structures and engage with a range of stakeholders to prepare for these related risks. Yet there still appears to be a mismatch between the extent to which ESG expectations are changing, both in the political and regulatory arena, and the way in which companies currently are managing them.

It is also no longer possible for companies to trade off their good performance on one sustainability measure with their underperformance in another. Just because a company performs well on addressing social concerns, doesn’t mean it shouldn’t prepare for environmental risks. Sustainability issues need to be embedded in a company’s business strategy in a comprehensive and holistic way.

We begin the 2020s with global wealth as measured by GDP higher than at any time in human experience, but experiencing a bout of extreme weather events across the world, bringing the effects of climate change into stark and immediate reality for more and more people, and underlining the urgency of tackling a crisis that is occurring alongside an equally ominous and precipitous decline in global biodiversity and the natural ecosystems on which our societies depend for their prosperity.