THE GROWING IMPORTANCE OF EFFECTIVE ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) POLICIES FOR COMPANIES IN NIGERIA

Climate change, social inequality, and unethical company operations are just a few of the issues facing the world today. More and more companies are recognising the negative impact that industry and business can have on the planet and its people and are driving change to turn that negative impact into a positive one. This change will have profound effects on the roles of lawyers and professional services firms as they transform in line with the demands and expectations of their clients, stakeholders at all levels, wider society and the planet. One key trend contributing to the positive change is ESG.

THE MEANING OF ESG AND ITS METEORIC RISE IN BUSINESSES TODAY

ESG has been brewing for a while, and is hitting the mainstream now, driven by united demand from employees, investors, customers and the society. All four groups seem to have shifted from a passive to an active stance and are forcing companies to step up against climate change and social injustice, among others.

ESG stands for Environmental, Social and Governance. It is a term widely used in relation to investment, referring to a set of measures designed to ascertain how a company manages its potential impact on society and the planet. In other words, it refers to a company’s commitment to do more than make profits, such as actively strive to contribute positively to the environment or social causes and to conduct itself responsibly.