The primary reason is strategic survival and access to capital. Developing nations cannot afford the "grow first, clean later" model without exacerbating climate disasters and social unrest. ESG provides a framework to attract foreign direct investment and development finance, which increasingly mandate environmental and social safeguards. For local populations, strong governance ("G") reduces corruption that diverts scarce resources, while social ("S") and environmental ("E") measures prevent the displacement and pollution that trap communities in poverty. Globally, implementing ESG prevents "carbon leakage" and ensures supply chains do not simply export exploitation.
A tailored, pragmatic approach is essential—not a copy of Western metrics. Priorities must include: (1) Governance first: Enforce anti-corruption and contract transparency as the foundation for all else. (2) Proportional regulation: Apply full ESG standards only to large extractive industries and state-owned enterprises, while offering simplified checklists (no child labor, basic waste management) for small and medium enterprises. (3) Capacity building: Use development banks to subsidize compliance costs, train local auditors, and link ESG to basic infrastructure like clean water and electricity. Avoid costly third-party ratings and carbon tunnel vision; instead, focus on local air quality, climate adaptation, and formalizing the informal economy. The goal is measurable improvement on the ground, not a high disclosure score.
A tailored, pragmatic approach is essential—not a copy of Western metrics. Priorities must include: (1) Governance first: Enforce anti-corruption and contract transparency as the foundation for all else. (2) Proportional regulation: Apply full ESG standards only to large extractive industries and state-owned enterprises, while offering simplified checklists (no child labor, basic waste management) for small and medium enterprises. (3) Capacity building: Use development banks to subsidize compliance costs, train local auditors, and link ESG to basic infrastructure like clean water and electricity. Avoid costly third-party ratings and carbon tunnel vision; instead, focus on local air quality, climate adaptation, and formalizing the informal economy. The goal is measurable improvement on the ground, not a high disclosure score.