Impact of ESG aspects on business

Johan Nel We're at a turning point. Financial factors alone are no longer being viewed as the pre-eminent drivers of value. Sustainability has become strategic and CEOs and boards are under increasing scrutiny to defend the overall sustainability of the companies they lead. To succeed and remain relevant, business has to respond to important issues facing the world today. Companies need to demonstrate how they create value – for shareholders and for society. In a number of surveys around the world conducted by the PWC Network, 90% of CEOs believe that environmental, societal and governance (ESG) issues and sustainability are important for driving enterprise value.Changes to our climate will have consequences for water supplies, infrastructure, agriculture, business operations, social services, healthcare, human lives and many other areas vital to economic and social development. Both the public and private sectors need to accelerate their climate risk mitigation and adaptation efforts. A number of businesses and countries have committed to a “net-zero” target in the coming years. This will fundamentally change the way that business is being conducted and what is considered to be strategic initiatives for the future. More and more shareholders and stakeholders expect effective climate action and governance from their companies.Companies have never been subject to as much scrutiny from society as they are now. 'MAJORITY'S VOICE'The power of social media and the “voice of the majority” are ever influencing factors in the sustainability of businesses. Reputation can easily be harmed and the effects on the business can be quite severe. Businesses need to demonstrate their contribution towards tackling key societal problems.'Business as usual', with a sole focus on profitability, has become somewhat obsolete. Purpose-driven companies are reaping the benefits of a focus on their triple bottom-line of people, planet and profit. This is the future, positioning your business for sustainable success. Companies need to earn their 'social licence to operate'. It is becoming a critical topic not only in the mining/extraction industry but is also an important consideration in other industries and jurisdictions. The question is: “Is your business giving this the attention it deserves?”Success is about embedding all of these principles – and more – into your strategy and operations to know you're prepared for tomorrow's reality, whatever it may be.How do you get there from here? Take the first step forward.Johan Nel is the partner: tax and operations at PwC Namibia. Contact him at johan.nel@pwc.com

Impact of ESG aspects on business

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Impact of ESG ­aspects on business

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Impact of ESG aspects on business