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Economics Raw Presentattion on ESG NORM.pptx
- 1. ESG Names and roll number
- 2. Intro • ESG stands for environmental, social, and governance. • It is a framework for evaluating how a company's operations impact the environment, society, and its own governance. • The world is facing a number of challenges, such as climate change, social inequality, and corporate corruption. • ESG investing can help to address these challenges by investing in businesses that are taking steps to mitigate their environmental impact, improve social conditions, and promote good governance. • ESG investing is also becoming increasingly popular with investors, who are looking for ways to invest their money in a way that is aligned with their values.
- 3. How to measure ESG performance • There are a number of ways to measure ESG performance. • Some common methods include: • Environmental: Measuring a company's greenhouse gas emissions, water usage, and waste production. • Social: Measuring a company's labor practices, human rights record, and community engagement. • Governance: Measuring a company's board composition, executive compensation, and corporate transparency.
- 4. The Benefits of ESG • Attracting investors and lenders: Investors are increasingly interested in investing in businesses that have strong ESG practices. This is because ESG-focused investors believe that these businesses are more likely to be sustainable and profitable in the long term. Common Techniques of ESG Investing are : 1. Positive screening 2. Negative Screening 3. Thematic 4. Full Integration 5. Best in Class
- 5. The Benefits of ESG Improving financial performance and reducing risk • Reduced interest cost because, CRISIL ratings consider ESG while ranking the business. Worse at ESG, higher cost of debt. • Reduced risk of stranded assets because of government regulations. • ESG can help to reduce the cost of insurance and other financial risks • Government subsidies Other Benefits Include • Build customer loyalty. • Increased Employee morale.
- 6. Potential costs of ESG: • Increased costs. Implementing ESG practices can sometimes lead to increased costs, such as the cost of investing in new technologies or making changes to production processes. However, these costs can often be offset by the long-term benefits of ESG • Compliance costs. Businesses may need to comply with a variety of ESG regulations, which can add to their costs. • Opportunity costs. Investing in ESG may mean that a business has less money to invest in other areas, such as research and development or marketing
- 7. Potential costs of ESG: • Risk of losing customers due to increased costs due to elasticity of the products. • Reputational risk. If a business is not seen to be taking ESG seriously, it can damage its reputation and make it more difficult to attract customers and investors. • Cost of consulting: Businesses may need to hire consultants to help them implement ESG practices. • Cost of training: Employees may need to be trained on ESG practices. • Cost of marketing: Businesses may need to spend more money on marketing to attract ESG-conscious customers and investors.
- 8. Conclusion • The conclusion of the cost-benefit analysis of ESG investing is that the benefits of ESG investing outweigh the costs. • The net benefit of ESG investing is likely to be positive in the long term, as the world becomes more aware of the importance of sustainability and corporate responsibility. However, the net benefit of ESG investing may be negative in the short term, as businesses incur costs to implement ESG practices. • Ultimately, the decision of whether or not to invest in ESG is a complex one that should be made on a case-by-case basis. However, the evidence suggests that the long-term benefits of ESG investing outweigh the costs.