At the recently concluded United Nations (UN) Climate Change Conference (COP29) in Baku Azerbaijan, the International Organization for Standardization (ISO) launched a cutting-edge set of new principles aimed at providing a comprehensive understanding of Environmental, Social, and Governance (ESG) benchmarks. This follows the conflicting interpretations of ESG, unsupported assertions, and challenging trade-offs among interested parties.
The term ESG which emanated around two decades ago, has evolved from an optional idea to a fundamental component of contemporary business. By 2030, it is anticipated that global ESG assets would have grown to over $40 trillion, driven by investors looking for both profits and impact. This illustrates widespread recognition that businesses must address their wider social and environmental effects.
Despite its increasing popularity, ESG reporting is far from standardized. Its scope can vary greatly, covering areas such as emissions and waste reduction (E), equity and social justice (S), and governance practices (G). These definitions often change across regions and jurisdictions, fashioning complexities in how businesses measure and report their efforts.
Against this backdrop, the ISO ESG Implementation Principles are designed to harmonize ESG reporting by establishing clear, measurable, and actionable standards for companies across sectors. The key pillars include:
- Holistic Accountability: Businesses are required to address not just their carbon footprint but their broader ecological and social impact.
- Science-Based Targets: Companies must align their sustainability goals with the latest climate science, including adherence to the 1.5°C global warming threshold.
- Inclusive Stakeholder Engagement: Greater emphasis on engaging underrepresented communities, ensuring inclusivity in ESG decision-making.
- Transparency in Reporting: Enhanced requirements for verifiable and comparable data to curb “greenwashing.”
- Resilience and Adaptation Planning: Encouragement for businesses to prioritize climate adaptation alongside emissions reduction.
The ISO principles mark a shift from voluntary pledges to mandatory accountability, fundamentally altering the way ESG is integrated into corporate strategies. Companies that fail to comply could face reputational risks, loss of investor and consumer confidence, as well as a likely exclusion from global markets. On the flip side, businesses that embrace these standards stand to benefit from improved brand equity, access to green financing, and resilience against climate risks.
Ohio, a manufacturing and agricultural powerhouse, is uniquely positioned to feel the ripple effects of these new ISO principles. From industrial hubs in Cleveland and Toledo to the farmlands of southern Ohio, local businesses must take proactive steps to renew and strengthen their commitment to lead the charge in ESG innovation.
Public Notice: OSBC remains committed to helping businesses through its informative workshops and networking events to foster cooperation for collective success. We welcome comments from the public on effective approaches to ensure that these new principles are effectively adopted by local businesses. The impact stories of businesses in Ohio driving sustainability efforts can be shared with Mayda Sanchez Shingler at mayda@osbcouncil.org or Daniel Awomnab at daniel.awomnab@osbcouncil.org.
About the Author: Daniel Awomnab is a social innovator with a multidisciplinary background in economics, public policy, and communication. As Communications Director at the Ohio Sustainable Business Council (OSBC), he leverages his interdisciplinary knowledge and passion for social innovation to tackle complex challenges, promoting sustainable development and aligning economic growth with environmental resilience.
ShareDiscover more from Ohio Sustainable Business Council
Subscribe to get the latest posts sent to your email.