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The acronym ESG – for Environment, Social and Governance – keeps the corporate world on its toes. In many places, however, governance still receives too little attention, even though it is a key factor for greater sustainability.
How do we achieve the sustainable transition? This question has been on the minds of companies across all industries – at least since the United Nations adopted its 2030 Agenda with 17 Sustainable Development Goals in 2015. More and more investors are paying more attention to ESG criteria in addition to key financial data such as return, risk and liquidity. So far, key figures relating to the environment, such as the reduction of CO₂ emissions, have been the most established. But social issues are also gaining in importance.
"Governance is at the heart of companies that are already further along in terms of sustainability," says Remo Häcki, Head of Sustainability, Corporate & Institutional Clients at ÃÛ¶¹ÊÓƵ Switzerland. Governance encompasses the principles of corporate governance. It starts with the management of the company and extends to the control mechanisms in a company. "A wide variety of studies show that governance is a key factor for a company's success," says Häcki: "It is not only a prerequisite for a company to be able to effectively address environmental and social concerns, but it also shapes the management and corporate culture."