The Environment of ESG by Kapil Mehta – CFO and COO at Allied Digital, USA
The United Nations claims we have just a decade before global warming reaches dangerous proportions. It's high time we put the environment on our priority maps. It's high time we take the Environmental, Social and Governance (ESG) criteria seriously!
It’s a desperate decade!
A United Nations report states that eleven years is all the time we have left to control global warming. The (E)nvironment is screaming for help and corporates need to put their might and money behind it
Environment tops our list of urgent global concerns. Yet, it is only when monetary values align symmetrically with ethical values that revolution starts. The Environmental, Social and Governance (ESG) framework is one such comprehensive set of standards that socially conscious investors are actively mandating to screen prospective investments.
These non-financial factors help to identify material risks as well as graph growth prospects. They encourage corporates to alter and enhance a wide spectrum of policies. Environmental criteria safeguard the planet, social criteria gauge relationships within the company and its communities. Lastly, governance puts the spotlight on the company’s stewardship, audits and shareholder rights. It’s a baseline monitor to measure the sustainability of an organization.
The ESG benchmark takes into its ambit all stakeholders – investors, staff, vendors and clients too. At Allied Digital Services Limited (ADSL) it’s this team of inter and intra stakeholders that joins hands to sustain earth-friendly corporate operations.
E = Environment + Economy
The E for earth and E for environment equals E for economics too. This makes the ESG criteria a powerful tool to align corporate calling. Chalked up at the very start line by investors, it’s poised to sprint along the company’s business chart. It’s the capital markets that spin the E, S and G change.
Environment goes mainstream
Environmental factors are getting due diligence because vested financiers are putting their coinage where their commitment lies.
A corporate’s positive or negative contribution towards energy efficiency, climate change, greenhouse emissions or waste management are all factors that matter. Every effort to combat global warming is worth counting.
After years of social responsibility conscious calls, this blueprint works hopes to erase greenwashing. With environmental hazards peaking, investors using this criteria work hard at influencing disclosure.
They also analyse potential negative effects for companies who do not balance environmental risks. These could range from spiralling post-production costs, negative media coverage or even litigation expenditure. Conversely, incorporating environmental concerns into a company’s corporate strategy translates to innovatively increasing efficiency, while bringing down costs.
Green corporate culture
At ADSL, several green initiatives recharge the company ecosystem.
Combatting climate change ADSL puts into practice several energy-saving activities on its premises. All its facilities include motion sensors, light equipment and low-energy devices. ADSL also increases the lifespan (beyond the regular three years) of thousands of assets for its customers.
The company is a Master System Integrator for smart IOT projects such as smart utility management, smart traffic management and ultimately smart cities. For example, Safe City projects have drastically reduced beat patrolling of police vehicles. The Command and Control Center (CCC) provides a cockpit view of the city, enabling virtual tours on demand. Strategically located police respond to CCC calls in the shortest possible time. This technology-driven policing, as compared to legacy policing, has a huge bearing on saving precious resources such as energy.
Reducing carbon footprint Mission decarbonizing is the responsibility of every employee at ADSL. Like companies across the world, COVID’s work-from-home culture proved to ADSL that operations continued in spite of a significant reduction in power consumption, due to non-utilization of office lighting and air-conditioning. Now, ADSL employs a hybrid work philosophy, uses occupancy-based lighting at their office premises and proactively encourages car-pooling. If technology makes it glocal, ADSL supports their staff to reduce carbon footprints.
Preserve, protect, plant Preserving biodiversity, reducing pollutants and combatting deforestation are massive, long-term goals. ADSL commits to engaging in earth-healthy initiatives. The company supports tree-plantation activities and creates a green office space. It adopts the usage of glass bottles for filtered water to restrict single-use plastic pollution through the bottled water culture.
Reduce, reuse, recycle ADSL aims to be a responsible resource user. It monitors usage of utilities such as power, thereby lowering fossil fuel waste and cutting greenhouse gas emissions. It also verifies its supply chain of various electronic goods with original equipment manufacturers or O.E.M.s who meet environmental markers. Also at ADSL, engagements with non-governmental agencies drive e-waste disposal with eco-friendly practices.
Recompensing companies that measure up to and excel on their ESG factors further incentivises positive change by encouraging continual progress. Similarly, restricting access to capital, urges defaulters or laissez-faires to push their might to improve their scores on the investment index. The environment needs all the help it can garner and it’s the duty of each one – individual and corporate - to help save the world with a sense of urgency. After all, planet earth is all we’ve got!