A new study from Google found that business executives struggle to prioritize environmental, social, and governance (ESG) measures amid the worsening macroeconomic environment.
This includes pressure from external stakeholders to cut corners in their sustainability initiatives and prioritize optimizing client relationships and driving revenue.
The second annual sustainability survey surveyed 1,476 top-level executives in 16 countries and found that the inability to execute, pressured by fewer resources, threatens to compound previous risks unless executives take the appropriate steps. These include greater accountability, better measurement and management, and well-defined leadership.
The study finds that the root of this priority shift stems from seeing sustainability as a short-term cost instead of a long-term investment. The difference between successful and unsuccessful ESG initiatives is the inclusive business impact on the long-term valuation and P&L for the business.
An example of business-inclusive ESG is the growing popularity of green building certification systems in Pakistan, which are being adopted due to the energy and resource crisis that hurt the ease of doing business.
In adopting green building certification systems, such as Leadership in Energy and Environmental Design (LEED), companies in Pakistan are reducing carbon emissions, energy, and waste, conserving water, prioritizing safer materials, and lowering exposure to toxins.
Organizations can achieve a LEED certification by adhering to prerequisites and credits that address carbon, energy, water, waste, transportation, materials, health, and indoor environmental quality.
A verification and review process by the Green Business Certification Inc. results in the awarding of points that correspond to the level of LEED certification: Certified (40-49 points), Silver (50-59 points), Gold (60-79 points) and Platinum (80+ points).
In 2017, the British Council Pakistan was awarded a Gold certification for its library in Lahore. In 2018, National Foods Limited received a Gold certification for its corporate office. In 2019, Artistic Milliners was awarded a Platinum certification for its Eco-Tech Unit, which has a daily production capacity of 25,000 garments and employs nearly 3,000 people.
The first residential tower in Pakistan to be LEED certified is One Hoshang by TPL Properties. the gold-certified building offers a sustainable and distinct lifestyle choice. At the Asia-Pacific Property Awards 2022-2023, the project won the five-star “Best Residential High-Rise Architecture” award.
“LEED certification is becoming increasingly important in Pakistan, as it is seen as a way to reduce energy consumption and improve the overall environmental performance of buildings,” said a report from the Consulting & Design Consortium in Pakistan. “Additionally, LEED certification can help reduce the overall construction cost and create a healthier indoor environment. As such, LEED certification is essential to promote sustainable building practices in Pakistan,” it read.
An ulterior reason for adopting green building certification systems in Pakistan is the synergies with the 17 Sustainable Development Goals (SDGs) set by the United Nations in September 2015 to end poverty, protect the planet, and ensure prosperity for all by 2030.
With capital markets focused on government bonds and secondary markets awareness being nonexistent, companies that rank high in ESG benchmarks and commit to practices aligned with SDGs are qualified for services of credit enhancement facilities such as InfraZamin.
The company only supports infrastructure projects with SDGs, such as encouraging gender-balanced employment opportunities, contributing to the upliftment of low-income segments of the population, and having a material positive impact on end-users.
The marked late shifts towards ESG-friendly practices in Pakistan stem from the untapped need for credit facilities and the demonstrated bottom-line impact on energy efficiency.