In Modern era, many investors before investing in a company looks into various aspects which ranges from Value to Values (Moral Values) to see the long-term potential of their investment. Where the value was initially perceived from “governance”, Values was recognized with Environmental and Social issues. If we broadly classified the issues wherein environment related issues deal with scarcity of natural resources, impact on climate change, changing demographics; Social issue range from reputation of organization, labour conflict, social impact of certain products/activities. Governance issues are more attributed towards poor management practices, Board compositions, Anti-bribery and corruption policy, Participation of shareholders.

Different Stakeholders defines these issues based on their outlook. Whereas Ecologist look them as a matter of social responsibility, activist as moral responsibility, investment managers take them as fiduciary duty to see the risk and returns are better controlled.

While considering these issues, how as responsible society we see the “sustainable investment” is the focal point.

Environmental, Social and Governance popularly known as ESG is not a new phenomenon and was being in practice since long with different names like responsible investing, socially responsible investing and was even mandatory to report in many countries. The primary aim for responsible investment was to see more towards Investment with moral and societal values rather than looking only for Value (ROI).

Looking into, adoption can be achieved by initiating with small steps, like, imparting training to staff on ESG, study of ESG issues prevalent in the relevant industry, regular monitoring & reporting, etc. Few Steps which are being offered by AZL are: -

• Identify the ESG factors related to nature of Organisation. Determine the positive value of factor. Consider Stakeholders for various factors.
• Set Overall Goals for each of ESG Factor, Divide them into short term and long term.
• Create a Budget/Timelines to implement strategies.
• Build a Sustainability Team fully equipped to understand the ESG framework.
• Define Success - Evaluate the Progress on parameters.
• Promote Your Performance.