The ‘social’ element in the ESG puzzle

THE “Memorable Disney Moments” holds the Guinness world record as the largest commercially made jigsaw puzzle in the world, both in the number of pieces and its overall size – with over 40,000 pieces and weighing almost 20 kg.

There is similarity in this jigsaw and the larger ESG puzzle that the world is grappling with, especially in the “social” element. Let me elaborate.

Environmental, social, and governance (ESG) refers to the criteria used by stakeholders (primarily investors) to assess a company’s impact on a community and the society. When evaluating investments, investors often look beyond a company’s financial metrics and focus on its ESG ratings. The latter reflects the trajectory and sustainability of a firm’s business model and the impact it makes on people and the planet in the deployment of its capital and the generation of its revenue and profits.