ESG 'ineffective' without right leadership
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ESG 'ineffective' without right leadership

A desire for a better future is essential to achieve sustainability and the environmental, social, and governance (ESG) principles alone may not be enough, Rajeev Peshawaria, CEO of Stewardship Asia Centre, said at a conference in Bangkok this week.

The ESG framework has been around since the 1990s but it is proving effective, he said.

Businesses today often engage in greenwashing to avoid trouble, and regulations typically only enforce the bare minimum of responsible behaviour, he added.

"Regulations may minimise harm, but they do not maximise good."

Most businesses today are profiting from challenges rather than creating profitable solutions to challenges, he noted.

Instead of ESG, we should shift to ESL, he said, where "L" stands for "steward leadership" -- a genuine desire to create a better future for stakeholders, society and future generations.

"The solution lies in 'doing well by doing good'," he said.

"Businesses have to make money and grow, but they need to do so by addressing the very challenges that are threatening humanity today: climate change, inequality and cyber crimes. Only then will the future of our children be secure," he said.

The Doi Tung Development Project under the Mae Fah Luang Foundation is a good example of companies that prioritise values and put society and the environment first, he said.

The project was initiated to transform the northern region's economy from opium production to sustainable agriculture. And its profitable business was built upon such a value-driven concept.

This approach has contributed to their long-term success, he said.

Mr Peshawaria said that to tackle today's existential challenges, the world needs genuine dedication and innovation that is not legislated or driven by extrinsic incentives alone.

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