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A bad idea: Separating 'E' from ESG

The S and G pillars are as important as E in assessing corporate performance

illustration: Binay Sinha
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Illustration: Binay Sinha

Ajay Tyagi
The Economist in its July 23 edition has eight articles on ESG or environmental, social, and governance investing, critically examining the practices being followed by corporations and funds worldwide, highlighting pitfalls and contradictions in the different approaches, and doubting the very concept itself.

In conclusion, one of the articles suggests that going forward, one should focus only on the “E”; and in fact within that, only on “Emissions”. The crux of the argument for this narrow focus is that E, S & G are different components and are at times unrelated. The performance of a company under all three components may
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