Understanding the Essence of ESG

At the recent 2^ndESG Summit, Mrs. Sheila Ujoodha, the CEO of the Mauritius Institute of Directors (MIoD), enlightened the audience about the importance and evolution of Environmental, Social, and Governance (ESG) factors in businesses today.

“ESG is a term we’ve all heard,” began Mrs. Ujoodha, “but do we understand its origins?” She traced the roots of ESG back to a UN report in 2004 that urged companies and investors to look beyond financial performance and consider their environmental, social, and governance impacts. The goal was to enhance shareholder value while benefiting society and promoting economic growth.

Over time, the concept of ESG has evolved, expanding to include a broader array of areas where companies affect society. With climate change becoming an increasingly crucial topic, Mrs. Ujoodha emphasized the need for organizations to tackle this issue proactively.

Drawing a powerful analogy, she compared an organization to a bridge. The bridge’s structure, like an organization’s governance structure, processes and departments, is designed to withstand everyday challenges. However, when external events such as climate change strike, the foundational structure can become worthless if it only focuses on internal dynamics, disregarding market-related aspects like ESG.

“The external environment is not just an influence but a vital component of our strategy and long-term sustainability,” Mrs. Ujoodha stressed.

Recognizing this, the MIoD has been raising awareness about the importance of addressing climate change as a core component of corporate governance.

“This year’s event is not just a summit. It’s a pledge to our commitment to responsible business practices”

The 2^nd ESG Summit marked a significant step forward, fostering rich dialogues and drawing widespread participation. “This year’s event is not just a summit. It’s a pledge to our commitment to responsible business practices,” Mrs. Ujoodha said.

Emphasizing that ESG principles are now an essential part of business strategy, she highlighted the need to adapt and thrive in this emerging market-oriented ecosystem. As such, the MIoD is proud to partner with Care Edge Ratings Africa for the 2024 summit, promising insightful ESG-related conversations and a platform for action.

Mrs. Ujoodha’s speech underscored the critical importance of ESG factors in today’s business landscape and urged companies to go beyond their internal dynamics and engage more proactively with the world outside their walls.