But what exactly makes these three aspects so crucial in the current landscape? Let's delve into the answers together in this article.
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Environment, Social, and Governance (ESG) represent critical criteria and frameworks for organizations committed to sustainable development. Consequently, numerous organizations are increasingly prioritizing these three principles.
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1. Environment
The "Environment" has garnered heightened attention in a world that has shifted focus from the purely economic progress of the industrial era. Presently, the world is grappling with the repercussions of pollution, leading to climate change such as global warming and intensified greenhouse gas emissions. Addressing and mitigating these emissions have become paramount for the contemporary and future development of our world.
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2. Social
"Social" is a pivotal indicator of an organization's relationship with stakeholders and those impacted by its operations. A positive rapport with stakeholders is crucial for the sustained smooth functioning of the organization.
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3. Governance
"Governance" serves as a benchmark for measuring the efficiency and transparency of an organization's management. Satisfactory corporate governance ensures operational efficiency, guiding the company in a positive and sustainable direction.
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These three fundamental principles are indispensable for every organization, and many are increasingly integrating ESG principles into their operations. This trend is not limited to organizational initiatives alone; investors are also showing considerable interest. Referred to as ESG investing, this approach involves directing investments toward businesses that strictly adhere to ESG principles.
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Siam Commercial Bank stands out as an organization committed to sustainable development, consistently aligning its operations with ESG principles. Recognized for its efforts, the bank received the Best Asset Management Award in the ESG category at the SET AWARDS 2022. The bank continues to prioritize governance in its operations, focusing on transparent risk management and organizational security, including robust IT governance following international principles.
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In conclusion, ESG investing is gaining traction, reflecting a collective effort towards fostering sustainability in the financial landscape. As organizations and investors alike recognize the significance of ESG principles, the trend is likely to shape the future of responsible and ethical finance.