When it comes to ESG, which stands for Environmental, Social, and Governance, it’s unlikely that global entrepreneurs or senior executives are unfamiliar with these three words. International investment institutions have begun to use these three dimensions to assess companies, and investors can use these scores as a consideration for stock selection, making “ESG investing” or “sustainable investing” a hot topic.
However, when delving into this topic, many people are often overwhelmed by its complex information and various standards and technical jargon. This has led many corporate leaders to adopt a wait-and-see attitude because they find it challenging to grasp accurate and comprehensive information.
In a previous interview with《The Icons》(Asia’s Leading Private Board Guru! TXA Private Board Secretary General Steve Hsu: Empower Start-up CEOs to Secure Funding and Soar from Struggle to Success!). This time, Steve Hsu, the founder of TXA Private Board and Secretary-General of MISA (Management Innovation and Smart Sharing Association), is back to share the strategic purpose and unique insights of his latest creation, the “ESG Private Board.”
“The market information may be complex, but who says you can only be a follower?”
“In times of chaos, heroes emerge—you can become a market definer!”
For many corporate leaders, to stand out in their industry, they need more than just capabilities, luck, and capital; they also need a vision that can “perceive the market” deeply and with a long-term perspective.
Steve Hsu points out that 2023 is the “ESG breakout year,” with various regulations, standards, and operational details emerging. While many corporate leaders recognize the importance of ESG, they often struggle to start due to the complexity of standards, technical terms, and regulations.
“If you hesitate to enter the game because you find the standards confusing and the terminology overwhelming, you’ll miss out on a once-in-a-lifetime opportunity for an industry shake-up! I believe that leaders should think from another perspective. While the government sets the rules, it’s the companies that truly understand the industry. Don’t wait for the regulations to become clear and the waters to settle; instead, get involved while the global game rules are still unclear. Do it within manageable costs and play along with these new rules!”
Steve Hsu gives an example that governments can’t possibly understand how to calculate the carbon footprint of a product better than companies can. Governments are even more puzzled. This is an excellent opportunity for companies to proactively participate in rule-making.
“If no other company or government organization has designed carbon footprint calculation rules (PCR, Product Category Rules) for your product yet, why not take the initiative to create rules for the industry? Governments allow industries to define and apply their rules after review. By doing so, you gain a say in the industry and build a favorable foundation for your brand image. Besides, sooner or later, you’ll have to comply with these rules for calculating carbon footprints, so why not actively participate in rule-making?”
Steve Hsu emphasizes that the execution plans for ESG vary from country to country, providing excellent opportunities for companies looking to actively participate in international markets in specific fields. Learning curves are lowest when you act early. After establishing practical cases, companies can actively engage in ESG dialogues in international supply chains. When it comes time to restructure the supply chain, companies will have a stronger position compared to their competitors. This is the essence of “heroes emerge in times of chaos.”
“While ‘do good without letting others know’ is a personal virtue, companies need to communicate actively.”
In addition to actively participating in ESG practices, Steve Hsu also suggests that corporate leaders should proactively convey their ESG beliefs and perspectives, letting the market know their values and mission. It’s not just about integrating these principles into the corporate culture; it’s about showing the world the company’s efforts in relevant areas.
“I often tell entrepreneurs that their views on ESG should not be coldly enclosed in sustainability reports but should be communicated through the media, especially online media. This can be done through in-depth interviews with leaders and even through lively storytelling. It should reach international media if possible.”
Steve Hsu emphasizes that this is a global competition for supply chains, and ESG is inherently global. Besides pushing themselves to the international stage, entrepreneurs have no other choice. ESG places a strong emphasis on stakeholder communication. Each section of the sustainability report should correspond to the company’s mission and vision and be presented in a storytelling manner to make the global market aware of your company. And these stories should not be limited to traditional print media but should fully utilize new media to engage in cross-border global communication with stakeholders.
“Thank you, 《The Icons》 for representing the international community and stepping up at this time, becoming a leading global wall of sustainable leaders. I see that you are not only providing entrepreneurs with the opportunity to tell their ESG stories to the world but also creating a virtuous cycle on the global sustainability track.”
Steve Hsu concludes by emphasizing that standing at the forefront of the ESG trend, any entrepreneur has the opportunity to gain more influence and even set the rules. However, the prerequisite is not only active participation in practice but also conveying their values to others:
“The concept of ‘doing good without letting others know’ does not apply to ESG. Your ideas, vision, values, and your company’s performance should be made known to the world. It’s not about pride or humility, or being high-profile or low-profile; it’s about a leader’s commitment and attitude, which can trigger more positive cycles. This doesn’t just bring more business opportunities and resources for yourself but also helps the entire ecosystem succeed!”