Investors, corporate boards and leaders were already under mounting pressure to instill environmental, social and governance (ESG) principles in investment decisions, corporate strategies and operations. Now the COVID-19 outbreak is reminding them that these principles are inextricably linked to the resilience and long-term success of a corporation.
“This crisis underscores that ESG is not a separate set of issues, and that corporations don’t exist in a vacuum,” says Holly Gregory, co-leader of Sidley’s global Corporate Governance and Executive Compensation practice. “Rather, consideration of environmental, social and governance issues are fundamental to what successful corporations do, and to the critical role these businesses play in society – providing goods, services and employment, and using their ingenuity to solve problems.”
Though much remains uncertain, it’s safe to say that in the months and years that follow, business leaders will be judged by how they respond to this crisis – and not only in managing cash flow, adapting supply chains and tackling business continuity issues.