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operate that way . We no longer live in a time where there ’ s only one pressing issue . Instead , businesses are facing challenge after challenge . Boards should be forward-looking and strategically assess how they can get ahead of potential future challenges .
When it comes to investments , whether that be in new technologies or in employees , another pitfall is that boards can push management to quickly show what the return on investment ( ROI ) is . But , it takes time for ROI to be realised . Boards can put less pressure on management to deliver and show ROI quickly by seeing the end goal of a specific investment . Seeing the long-term strategy instead of being focused on the timing is important .
Q . How important is it then for boards to be tying goals to ESG metrics ?
» It ’ s very important , boards need to be strategic in balancing pressure on profit with social purpose to not only satisfy stakeholder demands , but also thrive amongst the competition . For example , if your board doesn ’ t consider DEI investments as integral to its profit strategy , there ’ s another board of another company that does , and that company may pull ahead in being both more trusted by investors and other stakeholders and also driving profit .
When it comes to tying ESG metrics with profit goals , boards should be tying the two together . Ultimately , ESG is a business issue that is directly connected to value creation . Being open and transparent about your ESG metrics and the success in achieving them is a data point stakeholders , including investors , are likely expecting from businesses . Transparent ESG reporting can be an integral part of the overall business strategy , especially as it relates to long-term value creation .
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