The business community and investors
The business community is driven by investors who invest their money in companies in order to benefit. Money, time, ideas, and an opportunity cost are all part of the investment. Investors buy stock in a company with the expectation that it will provide returns in the future. Investors are an important component of the business sector since they assure market sustainability and economic development.
Environmental, social, and governance (ESG) criterion
An environmental, social, and governance (ESG) criterion is a fundamental investment decision-making feature that all investors must consider in order to make sustainable investments. Investors are concerned with the value of the company and its sustainability in the long run. As times change, the environmental approach toward investing has a great impact on society. Some company operations affect the environment directly leading to stricter regulations to be implemented so as to save resources and reduce pollution. Failure to embrace environmental considerations renders a business socially undesirable and consumers might shun away from the goods produced by the company. Low customer volume does cause a drop in profits which may lead to the downfall of a company. The use of social media and access to information by the general public has enhanced awareness of environmental preservation. The article is rich in information on business sustainability as far as governance, environment, and ethics are concerned.
Agreement with the article
I agree with the article. A good investment is one that is long-term oriented and is able to cope with emerging trends. Some companies, such as coal industries, are becoming obsolete as consumers feel an ethical obligation to shift towards lower emission products. New environmentally friendly products have been created to meet health and safety needs. Public concern over climate change is growing, hence companies not complying with such environmental regulations are finding it hard to appease their consumers. Business uncertainty resulting from undefined environmental policies by an investment tends to drive away investors. The use of ESG criteria in decision making enables businesses and investors to make viable decisions that will translate to profits and sustainability as far as environmental conservation is concerned (Kimbrough, 19).
Recommendation
Annual reports and the 10-K form show the management of the company and explanation of how it operates, makes money and in which market they are in. The ESG criteria do help in the projections of the company. Such reports tell the investors how flexible the company is to adapt to regulations that are put in place and also for ones projected to be implemented. The portfolio of the company also shows it can cater to the different consumers with their different ideals. The growth of a company is a holistic undertaking. Well-governed, socially responsible, and environmentally friendly firms may contribute less to portfolio risk. A viable business ought to make profits while recognizing the ethics and socially acceptable ideals. Employees, customers, and the processes used to create a product and the product itself must observe ethically acceptable practices to ensure business sustainability.
Conclusion
Our world is greater than us hence protecting it comes above all products and companies. Necessity is the mother of invention hence investors ought to invest in companies that are environmentally friendly, socially acceptable, and have embraced ethical governance. This will go a long way to preserve the world and give them more profits as the market evolves.
References
Kimbrough, Steve, and Hoong C. Lau. Business Analytics for Decision Making. Boca Raton : Chapman & Hall/CRC, 2016 , 2016.
