1 Green enterprises attract investor interest
A sharper focus on ESG is set to become a prerequisite for enterprises seeking investor interest as capital is now being consciously aligned with greener and more sustainable endeavours. Investors, customers and employees today prefer companies that are committed to green transformation and are prioritising sustainable, responsible and ethical practices along with their financial metrics.
2 Lowers cost of capital
Growing evidence across industries indicates that a better ESG score translates to ~10% lower cost of capital as the risks pertaining to compliance, carbon, communities, safety or regulatory shocks that affect the business are reduced.
3 Leads to better resource utilisation
In today’s volatile, commodity price environment, resource efficiency becomes critical. Unit cost structures of tomorrow’s sustainable enterprises will have to factor in more demanding standards for resource utilisation.
4 Builds finer regulatory relationships
Businesses that assume greater responsibility in integrating environmental and social considerations into organisation-wide functioning will ensure they don’t fall short of compliance in an evolving regulatory environment.
5 Green enterprises draw talent
The workforce of today is increasingly seeking purposeful work and an association with responsible and humane organisations. By anticipating and mitigating the ESG risks, businesses will be in a better position to attract and retain high-quality talent.