Tey Su Yin
Managing Consultant
ESG (Environmental, Social, and Governance) and ISO (International Organization for Standardization) are two different concepts that are related in certain ways.
ISO is an independent, non-governmental international organization that develops and publishes standards for various industries and sectors. The organization has developed a number of management system standards, including ISO 14001 for environmental management systems and ISO 45001 for occupational health and safety management systems.
On the other hand, ESG is a set of criteria used to evaluate a company’s performance in relation to environmental, social, and governance issues. The criteria are used by investors to make informed investment decisions based on a company’s commitment to sustainable business practices.
However, ISO standards can be used as a tool to help companies improve their ESG performance. There are numerous ISO standards related to environmental and social responsibility, such as ISO 14001 (Environmental Management System), ISO 26000 (Social Responsibility), and ISO 45001 (Occupational Health and Safety Management). The adoption of these standards can help organizations improve their ESG performance in the following ways:
1. Environmental sustainability ISO 14001 provides a framework for an organization to develop and implement an environmental management system.
This standard can help companies identify and manage their environmental impact, reduce waste, and enhance their resource efficiency. By adopting ISO 14001, companies can implement a structured approach to their environmental management practices, and reduce their carbon footprint.
2. Social Responsibility ISO 26000 provides guidance on how companies can operate in a socially responsible manner.
This standard helps companies to identify their social responsibilities, engage with stakeholders, and manage their impact on society. By adopting ISO 26000, companies can improve their social performance by implementing policies and procedures that promote fair labor practices, respect for human rights, and community involvement.
3. Occupational Health and Safety ISO 45001 is a standard for Occupational Health and Safety Management.
It provides a framework for an organization to identify and control its health and safety risks, and enhance its occupational health and safety performance. By adopting ISO
The adoption of ISO standards can also help companies meet the expectations of stakeholders, such as investors, regulators, and customers. By implementing best practices in their ESG performance, companies can improve their transparency, accountability, and credibility, which can lead to better financial performance and long-term sustainability.
Overall, while ESG and ISO are separate concepts, they can be related in certain ways. ISO standards can help companies improve their ESG performance by providing a structured approach to environmental sustainability, social responsibility, and occupational health and safety. The adoption of these standards can also enhance a company’s reputation, improve its transparency, and meet stakeholder expectations. As the importance of ESG factors grows in the business world, the adoption of ISO standards will likely become increasingly relevant for companies seeking to operate in a sustainable and socially responsible manner.
Sources; : https://greenbusinessbureau.com/, https://www.theedgemarkets.com/
