Paving the Path to Sustainability: The Rise of ESG

Sustainability seems to be a rising priority in various industries and we see this trend continuing for the years to come. In 2021, the amount put into sustainable related investments reached $120bn, more than double the 2020 numbers of $51bn. Let’s see why this is happening and what the future holds for ESG and sustainability.

How The Giants Are Pushing The ESG Landscape

Sustainable investing is currently a major trend in the financial sector. We see companies like BlackRock, the largest asset manager in the world, vowing to avoid investments with high ESG risk and voting against directors who are not taking interest in making a sustainable change to the company. This move is an effort to push more companies to be more compliant with ESG principles and more funds are following suit.

Many countries like Indonesia are also showing their commitment to fighting global warming by participating in the signing of the Paris Agreement which promises to combat climate change. Indonesia has also submitted its nationally defined contribution (NDC) which states that it will reduce greenhouse gas (GHG) emissions by 29% below business by 2030, or a 41% reduction of GHG depending on sufficient international financial support.

The Future Is Electric

When we’re talking about the future of sustainability, one of the first things that come to mind is EVs. We see companies like Tesla, the largest EV manufacturer in the United States, growing at an insanely fast rate because they offer a cleaner and eco-friendly replacement to the traditional pollution-producing vehicles. It is apparent that consumers are also starting to prefer greener products. If we take a look in Indonesia, we see similar trends happening such as the partnership between Gojek and PT TBS Energi Utama named Electrum. Electrum has employed the help of Gogoro, a global battery swapping company, to make Gojek motorcycles become fully electric. 

Indonesia is currently the hotbed for all things EV because they have an abundant source of nickel, which is the raw material for EV batteries. The Ministry of State-Owned Enterprises (BUMN) has also established the Indonesia Battery Corporation (IBC) to manage all EV batteries operations in Indonesia and has secured investments from the likes of corporations such as Hyundai Motor Company and Contemporary Amperex Technology Co. Ltd (CATL). 

ESG will certainly play an important role to secure a greener future for our planet and is going to be a major force in the economy as well. With the rapid adoption of ESG by companies, it will be interesting to see how the world will adapt to the ESG regulations and become a more sustainable ecosystem.