How resilience can be the real ROI

• The challenge: Companies built only for short-term returns often falter when crises hit, whether it’s climate risk, regulatory change, or reputational scandals.
• The ESG advantage: Strong environmental, social, and governance practices make businesses more resilient to shocks.
  • Environmental: Lower energy intensity reduces exposure to volatile fuel costs.
  • Social: Fair labor practices and engaged workforces reduce disruption during downturns.
  • Governance: Transparent structures reduce risk of fraud, litigation, or regulatory fines.
• Example: Apple has developed “Daisy,” a recycling robot that can disassemble old iPhones to recover cobalt, rare earths, and other critical minerals. By building closed-loop recycling into its operations, Apple reduces dependence on volatile global mining supply chains. This ESG-driven innovation not only cuts waste but also secures access to scarce resources making Apple more resilient to commodity shocks and geopolitical risks.

For funds, the lesson is clear: companies that embed ESG into operations build supply chain resilience and protect long-term value.

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Why trust is the new capital

• The shift: Stakeholders; LPs, customers, employees, regulators now demand responsibility and transparency.
• The ESG advantage:
  • LPs increasingly require Article 8+ or 9 classification.
  • Customers gravitate to brands aligned with their values (e.g., ethical sourcing, data security).
  • Employees, especially younger talent, prefer employers with clear purpose and ESG alignment.
  • Regulators reward proactive ESG with smoother approvals and reduced scrutiny.
• Example: Tata Group has built trust over generations by embedding responsibility into its business model. As early as the 1900s, Tata Steel introduced pioneering worker welfare measures: an eight-hour workday, free medical aid, accident compensation, maternity benefits, and pensions, decades before they were legally required in India. This legacy of fairness, reinforced through transparent governance and modern sustainability reporting, created deep trust with employees, communities, regulators, and investors. Today, Tata’s reputation for responsibility underpins its brand loyalty and global partnerships.
• Why it matters: Trust is a competitive moat. Funds and companies with credible ESG practices become preferred partners for capital, talent, and customers.

ESG is the new market expansion strategy

• The misconception: ESG is a cost center.
• The reality: ESG opens new markets, products, and revenue streams.
  • Climate tech and renewables are growing global sectors.
  • Diversity initiatives expand access to untapped talent and consumer bases.
  • Transparent supply chains win procurement contracts with larger buyers.
• Example: Maersk, once a fossil-fuel-heavy shipper, is decarbonizing global trade with a new fleet of green methanol–powered vessels. The shift not only cuts emissions but also created a premium service: customers like Amazon, H&M, and Volvo now pay extra for low-carbon shipping lanes to meet their own sustainability goals.
• Investor angle: ESG is not just license to operate, it’s a license to grow.

Building enduring value beyond the cycle

• The challenge: Markets often reward short-term profit maximization.
• The ESG advantage: A long-term ESG orientation compounds value over time.
  • Anticipates regulatory shifts.
  • Improves operational efficiency (e.g., energy savings, reduced waste).
  • Builds durable brand equity.
• Example: Ørsted, once Denmark’s largest coal user, transformed into one of the world’s leading offshore wind developers. By pivoting early to ESG-aligned strategy, Ørsted reduced its carbon intensity by more than 85% since 2006 and became one of the best-performing European energy stocks.
• Investor perspective: Transparent ESG reporting builds the long-term track record LPs increasingly expect before allocating capital.

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ESG is no longer just about regulation or reporting

It’s about building companies and funds that can survive disruption, earn trust, expand into new opportunities, and deliver long-term value.

For managers, the message is clear: treating ESG as a business advantage is not optional. It’s the foundation for resilience, competitiveness, and capital access in the years ahead.

With Planicorn, ESG becomes manageable. Our platform helps funds embed ESG into operations, automate disclosures, and capture value.

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Source Note: This article draws inspiration from research and perspectives in works such as Outlast: How ESG Can Benefit Your Business by Mukund Rajan.