ESG Challenges Becoming More Urgent in 2021

Adam Jacobson


March 1, 2021

In 2020, companies faced environmental, social and governance (ESG) challenges like the COVID-19 pandemic, the global movement for racial justice and police accountability, and climate change, and these issues are expected to continue as top risks in 2021, according to the S&P Global report Sustainability in 2021. In terms of the pandemic, unequal access to health care and distribution of stimulus funds, and disparities between which workers will be asked back into potentially unsafe workplaces will all reinforce structural inequities.

Climate change will also be a key challenge as the United States rejoins the Paris Agreement, and countries around the world increasingly invest in renewables and seek to reach carbon neutrality. Stakeholders will continue to push companies to take positions on social issues like diversity and equality, while new regulations may force firms to disclose how they are pursuing ESG standards. In addition, increasingly degraded biodiversity and habitats will impact supply chains and may spark more environmental protection regulations.

Adam Jacobson is associate editor of Risk Management.