‘S’ for Social License to Operate

The ‘S’ in the ESG trifecta stands for Social, which is a shorthand of sorts. Social is ‘Social License to Operate’ where buy-in from your employees, consumers, communities, and vendors in a Global Value Chain is a dynamic process, and it needs a F5 routinely.

With the advent of the digital, each stakeholder is a whistleblower with a camera phone. Reputational risk impacts the brand, and in turn valuation. That should be a material rationale for the ‘fuzzy’ S.

A lot of companies conduct social listening to gauge sentiment to measure reputations.

The Sustainable Finance Spectrum

Funds which integrate ESG factors can be considered as ‘shallow green’, while additionality if proven can be categorized as ‘light green’

Authentic if the funds are directed towards the just transition, then it can be considered as ‘dark green’.

Sustainable finance spans the spectrum. The right nomenclature is key to avoid green washing.