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ESG & ITS IMPORTANCE FROM THE POINT OF VIEW OF BOARD MEETING

ESG & ITS IMPORTANCE FROM THE POINT OF VIEW OF BOARD MEETING

By Nandini Menon
Calendar

Aug 12 th 2021

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INTRODUCTION:

ESG stands for Environment, Social, and Governance. In India, we have various laws governing Environmental issues. But it is only during recent times it has gained a lot of prominences because there is a need to assess these parameters. The S in ESG stands for Social, wherein all labour law-related matters are covered. G stands for Governance, which emphasis on Transparency and Disclosures.

ESG- Environment:

The environment aspect describes how a company manages its resources (specifically non-renewable). It further pays attention to the waste management policy of the Company. How it handles the potential problems arising from environmental matters? In India, we have umpteen laws governing environmental issues. To name a few-

  1. The Environment (Protection) Act, 1986
  2. The Forest (Conservation) Act, 1980
  3. The Wildlife Protection Act, 1972
  4. Water (Prevention and Control of Pollution) Act, 1974
  5. Air (Prevention and Control of Pollution) Act, 1981, etc.

ESG-Social:

The social aspect covers a broad spectrum of potential issues. Again we have numerous laws governing labour issues. 

“Human Resources are the most valuable assets the world has. They are all needed desperately."

A few questions the Board should consider while evaluating this aspect/Criteria of ESG are-

  1. What is the relationship between work and remuneration? Are the employees paid enough as compared to similar jobs in the same/similar industry?
  2. Does the Company offer any retirement benefits to the Employees? If yes, what is the retirement plan?
  3. What are the other benefits an employee procures from the organization?
  4. Training and other programmes, as required from time to time, to enhance and upgrade the employees as per the latest changes.

ESG- Governance:

The Governance aspect includes how well a company is managed by the top-level executives. Whether the executives and the Board attend to the various stakeholder's interests? Whether they give back to society? 

Complete and True disclosure about the operations of the Company; specifically Financial and Audit disclosures are often considered to be good corporate governance practices.

QUESTIONS FOR THE BOARD ROOMS TALKS:

1.      Is the company’s mission/vision/purpose in alignment with the ESG objectives?

  1. How is the company communicating its ESG objectives with its stakeholders?
  2. What are the data required for the company to assess the impact of ESG performance and its impact on the company's performance (Financial/Non-financial)?
  3. How does the data aid in or influence the company’s Internal Management decision-making?
  4. How does the company strike a balance between its purpose and ESG now during the pandemic? (i.e.Covid-19)
  5. Does the company re-invent/refresh its ESG objectives as per the changing times?

ADVANTAGES:

  1. Environmental, social, and governance (ESG) criteria are an increasingly popular way for investors to evaluate companies in which they might want to invest. Environmental, Social, and Governance (ESG) analysis and reporting can provide valuable insights and help create long-term value for stakeholders.
  2. It can significantly impact the financial metrics of a company and better inform investment decisions.
  3. ESG criteria can also help investors avoid companies that might pose a greater financial risk due to their environmental or other practices.

CONCLUSION:

The board’s role includes looking into matters on ESG and how it can be integrated as a core value of the organisation. Those who have already embarked on this journey and stay the course will likely be well-positioned to thrive in the future.

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Category

  • All
  • Boardrooms
  • BOARDROOMS
  • Independent Directors
  • Role of Board
  • Mindset Shifts of Boards
  • Independent Directors and Promoters
  • Sustainability / ESG
  • business implication
  • employee exits
  • COMMITTEE MEETINGS
  • Union Budget
  • Independent Director
  • Grow with Governance
  • Grow with Governance
  • INDEPENDENT DIRECTOR
  • Entrepreneurial Board
  • ESG & ITS IMPORTANCE
  • leadership coaching
  • Change Management
  • Advisory Boards
  • Boards
  • Boardroom
  • Brand Yourself as a Leader of the Company
  • Kindness
  • Are you hesitant to speak in the Boardroom!
  • Governance & ESG
  • Directors
  • Independent Directors
  • Corporate Governance
  • Leader development
  • Gratitude, Purpose
  • decision making
  • Systematic Investment Plans in Emotional Intelligence
  • Corporate Governance
  • The Board’s Role in ESG!
  • Balance Boards
  • Agility and Compassion
  • Governance and Board
  • Diversity and Inclusion
  • Directors,Promoter Directors
  • Board Members, Directors and Independent Directors
  • Board and Senior Management
  • New Directors
  • Cyber Insurance
  • Salary Increment
  • Economy Growth
  • Human Resources
  • Generating Wealth Beyond Money
  • Agile Mindset for Leadership
  • Aspiring Independent Directors
  • Board Leadership
  • Corporate Governance & Women on Boards
  • BOARD MEMBER
  • SME
  • WOMEN DIRECTOR
  • BOARD MEMBERS

Archive

  • 2021
    • April (3)
      • Will you drive your vehicle without a dashboard?
      • Are you making SIPs to improve your Emotional Intelligence
      • Corporate Governance needs a Moral Compass – Ethics in Indian Boardrooms!
    • August (9)
      • Grow with Governance: ESG is the umbrella for CSR, says Vedanta's Roma Balwani
      • Grow with Governance: PadUp Ventures' Rajat Jain Demystifies Correlation of Governance and Economic Growth
      • Grow with Governance: Family governance impacts the culture of a family-run business, says Equations Advisors' Mita Dixit
      • Entrepreneurial Board
      • NEW REGULATORY PROVISIONS RELATED TO INDEPENDENT DIRECTORS
      • ESG & ITS IMPORTANCE FROM THE POINT OF VIEW OF BOARD MEETING
      • Start early, don't wait till retirement to become an Independent Director, says Increate Value Advisors' Milind Sarwate
      • The winding road of leadership coaching in the post-pandemic era
      • Challenges of Organizational Culture Change
    • February (4)
      • Re-examination of Purpose by the Boards in Post -Pandemic Era
      • What Makes Great Boards Great! Performance Evaluation by Boards and Role of Independent Directors
      • Promoter Director – Time to become Custodian of Governance!
      • Diversity and Inclusion – The Board Perspective!
    • January (2)
      • New Directors - Have you done your due diligence
      • Cyber Security Insurance and Boards
    • July (7)
      • Why Advisory Boards Are Important for Indian Business Corporates?
      • Grow with Governance: ESG essential to repair the damage economic activities caused to the earth, says CA Shailesh Haribhakti
      • Top 10 areas to contribute in Boards as Independent Directors
      • Top 10 Questions to Ask in Boardrooms!
      • Essential HOWs of Boardroom!
      • Kindness is key
      • How to Brand Yourself as a Leader of the Company?
    • June (6)
      • Leading from the Boardroom
      • Are you hesitant to speak in the Boardroom!
      • The Neem Project a Leadership case study
      • Directors Liability in India
      • Why do promoters need Independent Directors?
      • Corporate Governance Deviation – Infosys Case Study
    • March (4)
      • Board Refreshment: Finding the Right Balance for your Board!
      • HR Governance and Board – How Important Is It?
      • Agility and Compassion: Two Pillars for Boards in the Post Pandemic Era!
      • Modernizing Governance: The Board’s Role in ESG!
    • May (3)
      • Restructuring appraisals in 2021 – Gratitude, Purpose & Meritocracy
      • How do you make your personal Brand?
      • Leadership Coaching: How does it help Leaders
    • October (2)
      • Are Independent Director’s required on the Board?
      • 'Ethics & Governance' lesson should start from school, says Federal Bank's Independent Director, Sankarshan Basu
    • September (3)
      • Grow with Governance: As an Independent Director ensure your voice is heard, says Apurva Purohit
      • Grow with Governance: Push for ESG agenda; pool CSR funds to maximise impact, says Ranganath NK, former MD of Grundfos Pumps
      • Grow with Governance: Boards should prepare companies for different risks, says National Insurance Academy's G Srinivasan
  • 2020
    • August (4)
      • WOMEN DIRECTOR-An Emerge
      • ARE YOUR BOARD MEMBERS SAVVY WITH FINANCIAL TERMS AND EXCEL IN FINANCIAL LITERACY QUOTIENT AS PER COMPANIES ACT 2013 MANDATES.
      • BOARD MEMBER SELECTION- A TASK OF PERFECTION
      • SME IPO – AN OPPORTUNITY TO CAPITALIZE YOUR BUSINESS
    • December (3)
      • Good or bad, Salary Increments always cause a heartburn among employees
      • Is Economic Progress Enough?
      • Emotional Intelligence
    • November (3)
      • Generating Wealth Beyond Money
      • "Agile Mindset for Leadership"
      • Tips for Aspiring Independent Directors
    • September (3)
      • Independent Director
      • Lean Thinking Boards
      • Corporate Governance & Women on Boards
  • 2022
    • August (1)
      • Liability of Independent Directors – An Important Aspect of Corporate Governance
    • February (4)
      • A Hero's Farewell: How to handle employee exits with dignity
      • Green Bonds: An Instrument for Financing a Sustainable Future
      • Tool for effectiveness of Board Committees - Ask Right Questions
      • Russia-Ukraine war and India’s Business Implication
    • July (2)
      • Stagnation or Evolution – Mindset Shifts of Boards when Company sees Stagnated Growth
      • Risk Assessment and Minimization Procedures – Role of Board
    • March (2)
      • A study on Sustainability Report of Container Shipping Companies.
      • India and The ESG impact of Crypto Currencies
    • May (1)
      • Independent Directors liability under GST
    • November (1)
      • Workplace Sexual Harassment and the Role of Board
    • October (2)
      • How many Boards are too many?
      • Women in Indian Boardrooms Vs Diversity = Inversely Proportionate
    • September (2)
      • Organizing for the Future – Important keys to becoming future ready
      • Are you ready to serve on the Board?