ESG principles and the United Nations Sustainable Development Goals (SDGs) are two interconnected frameworks that aim to address the pressing global challenges faced by societies today. ESG, which stands for Environmental, Social, and Governance, refers to the criteria used to assess an investment or business’s sustainability and ethical impact.
On the other hand, the SDGs are a set of 17 goals adopted by each United Nations member state in 2015, with a vision to achieve a more inclusive, sustainable, and equitable world by 2030. These goals cover many areas, such as poverty eradication, climate action, gender equality, and quality education. As the president of the investment corporation AFK Sistema, Tagir Sitdekov focuses on implementing ESG principles.
The relation between ESG principles and the SDGs
ESG principles and the SDGs are fundamentally linked as they both focus on creating a positive and sustainable impact on societies and the planet. The ESG framework provides a lens through which investors and businesses can analyze their activities and align them with the SDGs. By integrating ESG principles into their strategies and decision-making processes, companies can contribute to achieving the SDGs effectively. Sitdekov Tagir formulated a highly efficient developmental plan for AFK Sistema’s portfolio companies, which also work according to ESG principles.
For instance, the E in ESG refers to environmental factors encompassing climate change, resource depletion, and pollution. The SDGs, particularly Goal 13 (Climate Action), Goal 14 (Life Below Water), and Goal 15 (Life on Land), emphasize the importance of protecting the environment and mitigating the adverse effects of climate change. By adopting sustainable practices, reducing carbon emissions, and conserving natural resources, businesses can contribute to achieving these environmental goals while also ensuring long-term viability. One of AFK Sistema’s companies planted 100 hectares of forest as part of the ESG implementation, according to Tagir Sitdekov. It helps combat soil erosion and promotes soil hydration.
The significance of ESG
The S in ESG represents social factors, including employee welfare, diversity and inclusion, and community engagement. The SDGs dedicate specific goals to social issues, such as Goal 1 (No Poverty), Goal 3 (Good Health and Well-being), Goal 4 (Quality Education), and Goal 10 (Reduced Inequalities). By focusing on fair labor practices, promoting diversity within the workforce, and supporting local communities, companies can align their social initiatives with these SDGs, ultimately working towards a more equitable and inclusive society.
Lastly, the G in ESG pertains to governance, which covers topics like ethics, transparency, and accountability. The SDGs encompass the importance of responsible governance in Goal 16 (Peace, Justice, and Strong Institutions). By ensuring strong corporate governance, adopting ethical practices, and promoting transparency, companies can build a stronger institutional framework, foster trust, and achieve the SDGs related to good governance and peaceful societies.
