THE CONTINUING RELEVANCE OF ESG INITIATIVES

Climate action and diversity policies are, of late, facing geopolitical headwinds.

- GEETHA RAVICHANDRAN

The US government exiting the Paris Accord and discarding diversity, equity and inclusion (DEI) policies, branding legitimate concerns on environment and inclusivity as an outcome of the "woke virus", is setting the clock back. Ripples are being felt in the corporate sector across the globe. Milton Friedman's theory that the corporation exists to maximize profits for its shareholders seems to be back in vogue. The theory propounded by Edward Freeman that companies should consider the interest of all stakeholders and not merely that of their shareholders is under threat of being displaced. ESG (Environment, Social and Governance) initiatives integrated into business processes and decision-making, considering long-term sustainability and stakeholder interests, are being reconsidered.