The Tap in Explainer on ESG features Dr Karan Thakur, Vice-President Sustainability & ESG, Apollo Hospitals. ESG — that’s environmental, social and governance – is a risk management framework that has been brought in for companies and institutions. The three pillars of ESG are around environment, social determinants and governance aspects—all of which are important factors in ensuring a company is operating ethically and responsibly.
The essence of this is a move from shareholder capitalism to stakeholder capitalism. Earlier, it was okay just to obtain a license and and start manufacturing, creating a product or service and delivering it to your consumers. But now we need social license as well. Are you doing enough in the communities that you operate in? Do you follow certain metrics that give them a certain sense of safety and security in terms of how good the management is? So what does it do? It looks at a certain set of standards (the GRI standards), which will be critical going fwd.