From an environmental point of view, the ESG initiative is pushing many companies to significantly reduce their environmental footprint and net zero commitments are increasing. The effort to make processes more efficient and to research new technologies to reduce emissions will, according to Malik, cause companies to incur higher costs through research and development expenditures.
Likewise, upgrading to more energy efficient modes of transport and office space will certainly lead to higher capital expenditures. Efforts to move to sustainable packaging in the manufacturing industry, Malik added, will result in higher costs that “could easily be passed on to the end user”.
On the social front, she pointed to likely hiring and retention costs associated with increased efforts to promote equality and workforce diversity. In order to achieve gender equality in particular, measures to retain women, in particular maternity leave, need to be examined more closely.
“One might speculate that the sheer cost and complications of childcare were one factor in many working mothers choosing to quit their jobs.” [during the pandemic]“She said, noting that if companies want to keep this demographic down, they must offer some form of help.
Similar considerations apply to the recruitment and promotion of workers from ethnic minorities, poorer socio-economic backgrounds and workers with disabilities. Recruiting campaigns, skills training, and retention initiatives that focus on such employees will be a constant expense for companies, Malik said.