Bürkner: Making ESG key performance indicator for…

On themorning of March 29, a session on Measuring Sustainability in the ESG Era was held during the Boao Forum for Asia Annual Conference 2023. Hans-Paul Bürkner, Global Chair Emeritus of Boston Consulting Group, stressed the importance of ESG from the perspective of customers and investors and the need for ESG to be included as a critical performance indicator. He also discussed the concerns companies face when conducting ESG.

Bürkner said ESG is critical. Otherwise, companies cannot keep the license to operate. Therefore, companies need to pay attention to the environment and social well-being in the communities and countries. The government has to ensure the transparency of these companies, and the license to operate is the base. In addition, customers expect companies to deliver ESG values, and investors increasingly expect them to achieve more ESG values. From the perspective of the supply chain, industry customers also hope that companies perform better in ESG. If companies face negative social media storms in terms of ESG, they are in danger. In this context, it is necessary for all companies to follow the values of ESG.

The concern when conducting ESG is to find a baseline. Companies have realized the need to deliver on ESG goals, so it is necessary to find a baseline such as carbon emissions, diversity inclusion, or the contribution needed in social governance. Therefore, to implement measures in the future, companies need first to define their goals and then specify steps to achieve them. These standards may come from government regulations or other guidelines. For example, in Europe, a new law on supply chain responsibility requires companies to ensure that their suppliers worldwide comply with ESG standards. This is a challenging task because companies not only need to monitor the situation of their first-line suppliers but also that of second- and third-line suppliers. If any supplier violates social values, the company in Europe can be charged. Overall, companies need to understand where the benchmark is.

Companies strive to make ESG part of their key performance indicators that management will follow. The focus is not only on revenue or profit growth but also on a company's social impact through key ESG parameters and metrics. Regarding rating comparison, Bürkner remarked that there could not be just one standard imposed by one part of the world, and there needs to be consideration of how local government operates, as well as time spent engaging in focused dialogue to resolve issues.

亚洲浪潮，博鳌视野

立足亚洲 面向世界

传递论坛最新动态 促进亚洲深度合作

全球重要对话的传达者 亚洲共同发展的瞭望者

原标题：《Bürkner: Making ESG key performance indicator for companies》

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