Apart from technological advancement, there has been growing concern in the past several years about the environment. People have become more aware and push their governments across the world to have sustainable development. All these buzzes have led to the concept of Environmental, Social, and corporate Governance (ESG).
What is ESG?
Environmental, Social, and corporate Governance (ESG) is about taking measures toward environmental and social responsibility by raising standards and accountability for a better future. The main aim of ESG is about capturing all non-financial details regarding risks and opportunities surrounding three areas of Environmental, Social, and Governance.
Environmental
In environmental criteria covers the policies undertaken by companies in safeguarding the environment, and addressing climate change.
Social
Managing relationships with its employees, customers, vendors, and the local area population where the unit is located comes under social criteria.
Governance
The miscellaneous things regarding leadership in the company, payment, audits, internal functioning, shareholder rights, etc. fall under the governance branch.
The importance of ESG in business
Corporates across the world view ESG as a business strategy that is legitimate and rest others take it as a self-regulatory initiative. Some even take ESG as a new type of marketing strategy that greatly influences consumers who are concerned about environmental and social aspects.
Even if we keep these apart, one this is sure the outcome of ESG at business levels will be positive and greatly beneficial for society at large. Measuring progress and striving for sustainability will help businesses showcase their achievements while holding them accountable for their goals.
How blockchain helps in measuring and attaining ESG
Blockchain development can be harnessed by businesses that want to attain ESG, as businesses often deal with certain complicated supply chains across the world. In the wake of different regulations over the different geographical regions, the need for versatile technology is needed and blockchain correctly fits in the space.
The innate qualities and principles of blockchain that helps businesses in attaining ESG:
Trust
Blockchain being based on distributed ledger technology, helps businesses in measuring the impact their business does on the environment. Everything right from sourcing the materials from vendors to processing is kept in records that are immutable.
Transparency
There is often manipulation of social and climate-related information, but blockchain’s immutable nature prevents that while ensuring transparency. Stakeholders like investors, consumers, and regulators get real-time updates of measures taken through the blockchain.
Traceability
Blockchain has demonstrated its ability to trace in the financial sector, and now businesses can exploit it for ESG metrics around the world. Across the different sectors and supply chains, the blockchain will come in handy as a tool to help tackle climate change.
Conclusion
Maintaining global sustainability, ethics, and equity can be a challenging task for corporates as it requires continuous monitoring and innovation at multiple fronts. Blockchain as a technology can chip in to introduce trust into the ESG ecosystem and demonstrate the actions taken on a real-time basis which can streamline the strategy says a senior blockchain developer at Rejolut. The blockchain-powered transparent and verified record of ESG metrics makes it possible for an organization to see its progress and receive their due credit.
