The pillars of the ESG trifecta are all deep subject matter areas in themselves. Yet they make sense or matter not for the green premium but as a calibration factor. Environmental & Social elements are both externalities which are priced in a fashion to internalize them. The Internal Price of Carbon or a Biodiversity Price in the future through impact accounting are mechanisms. Carbon and Biodiversity are tangled with each other. Governance is an input. ESG are tied in through an ANT network as nodes in a risk map.
ESG risk and impact accounting are joined at the hip. Reporting to Ratings Journey has impact accounting somewhere in the middle of the continuum. ESG as a future making approach channelizing funds for a just energy transition is a real end goal. ESG is a core aspect of the ‘Just’ in Just Energy Transition. Making sense of the interlinkages is vital as understanding is patchy at best even among practitioners.