Maybe ESG will go away?

Environmental, Social and Governance (ESG) is not going away any time soon.

Story time.

My father was a dentist and he had a sign in his office that read:

“The five most dangerous words in the English language: maybe it will go away.

It’s as true for ESG as it is for dentistry. Wishing and hoping a toothache will go away is as effective of a risk management strategy as hoping that climate, social and related risks will not impact your business. It’s just not effective.

What does this have to do with climate-aligned contracts?

One way to demonstrate that your company is serious about its ESG commitments is by formalizing them in a clear and, if needed, enforceable way, through climate-aligned contracts.

A contractual agreement turns a “goal” into a commitment. And enforceable language that is clear, transparent and outlines key metrics and milestones sends a direct message to stakeholders - both private parties and government regulators - that your company is serious about its ESG work. Contracts formalize intent, and support actionable climate commitments; not fluffy “goals.”

It’s a key distinction that helps manage a variety of evolving risks.

So what should you do?

ESG doesn’t have to be prefect to be relevant. Let’s be patient, and ask what ESG could be instead of criticizing what it isn’t.

The bottom line: the acronym that everyone loves to hate is not going away any time soon. Keep going. And align your contracts with your ESG goals, metrics and reporting frameworks.

Cover photo Photo by Feri & Tasos on Unsplash