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  • Governance I Risk I Compliance Management

What is ESG?

ESG (Environmental, social and governance) criteria increase interest to companies, their investors and other stakeholders. With growing concern about the ethical status of quoted companies, these standards are the central factors that measure the ethical impact and sustainability of investment in a company. 

In less than 20 years, the ESG movement has grown from a corporate social responsibility initiative launched by the United Nations into a global phenomenon representing more than US$30 trillion in assets under management. According to Juliet Chung and Dave Michaels, “ESG Funds Draw SEC Scrutiny”, Wall Street Journal in the year 2019 alone, a surge of capital totalling US$17.67 billion flowed into ESG-linked products, an almost 525 per cent increase from 2015.

ESG factors cover a wide spectrum of issues that have traditionally been excluded from financial analysis:

Environmental:

  • Climate change
  • Resource depletion
  • Waste and pollution
  • Deforestation

Social:

  • Working conditions, including the use of child labour
  • Local communities
  • Conflict
  • Health and safety
  • Employee relations and diversity

Governance:

  • Executive pay
  • Corruption
  • Political affiliations and donations
  • Board composition, diversity and structure
  • Tax strategy

These factors have increasing financial relevance as global interest in ethical investment grows. 

Meeting the ESG Imperative

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How does accredited certification help achieve global goals for sustainable development?

Governments and business are key drivers for making and implementing decisions that have a lasting effect on society. The UK government have already outlined their plans for driving the realisation of their goals through regulations to improve society and the environment so no one is excluded. With many regulations becoming stricter and enforceable through law, business are encouraged to adopt standardised and measurable processes so that their operations have a positive influence of the environment.

Accreditation Certification offers the most transparent and most widely accepted route for formal recognition world-wide of credible and trustworthy conformity.

A trusted platform for policy makers

Accreditation benefits both a country’s domestic economy and its international trade by improving trade flows and bringing good governance:

  • For governments it helps them meet regulatory and legislative responsibility, reducing the uncertainties in decisions affecting the protection of human health and the environment.
  • For business, it is a greater acceptance of products and services and a means to avoid multiple testing, inspections and certifications leading to more satisfied customers, reputational advantage.
  • For consumers – greater public confidence goods and services.

Recognised the world over accredited standards are a solid base on which to create policy that helps further SDG goals such as human rights, water and energy efficiency, health, and safety and more not only for governments and the public sectors but the private sector. Not only are these accreditations a great tool for reinforcing an organisation’s sustainability commitment and goals, but they have also been proven to help drive growth.

Accreditation helps by creating:

Standardisation – creates the national and international standards that describe good practice in how things are made and done.

Conformity assessment – testing and certification to ensure the quality, performance, reliability, or safety of products meet specifications and standards before they enter the market.

Measurement – implementation of specifications and standards to ensure accuracy, validity, and consistency

Using an accredited certification body provides a trusted platform so that policymakers, businesses, and other stakeholders can make better use of the knowledge allowing them to build the framework needed to strengthen the implementation, measurement, and monitoring of their own sustainable development goals.

Why not read more on how does accredited ISO certification link with the Sustainable Development Goals?