Sustainability is no longer a slogan. It is a strategic imperative. Across boardrooms and financial institutions, the rise of ESG, Environmental, Social, and Governance, criteria is redefining how businesses are valued, managed, and held accountable. For companies in both advanced and emerging economies, embracing ESG is no longer just about corporate social
responsibility. It is now about survival, access to capital, global market relevance, and long- term competitiveness.
The logic behind green capitalism is straightforward. As the world confronts climate change, resource scarcity, and rising inequality, investors, consumers, and regulators are demanding more from business. Companies that ignore environmental risks or social impact are being penalized in the markets, while those that adopt sustainability standards are gaining trust, brand equity, and investment flows. ESG is becoming a proxy for long-term resilience.
Global investors are leading the shift. Institutional funds, sovereign wealth portfolios, and development finance institutions are integrating ESG benchmarks into their screening and decision-making. Climate-related financial disclosures, carbon pricing, biodiversity footprints, and labor rights compliance are now seen as fundamental risk indicators. In many cases, ESG scores determine whether a company can raise capital at favorable terms or
access certain stock exchanges at all.
In Asia, the momentum is building. Regulatory bodies are introducing mandatory reporting standards. Banks are tying lending conditions to sustainability metrics. Supply chain compliance is being linked to environmental audits and social safeguards. For export-oriented
economies, especially those competing in European and North American markets, aligning with ESG is fast becoming a prerequisite for entry.
Sri Lanka stands at a critical juncture. The country is facing immense environmental pressures, ranging from coastal erosion to biodiversity loss and energy insecurity. It also faces the challenge of economic recovery amid tight fiscal conditions. Integrating ESG into the core of business strategy offers a pathway to attract sustainable finance, improve operational efficiency, and tap into new markets.
Local businesses, especially in sectors such as tourism, agriculture, apparel, and construction, have an opportunity to lead by example. Investing in renewable energy, waste reduction, fair labor practices, and ethical sourcing is no longer just about compliance. It is about brand differentiation and future-proofing. Consumers, particularly younger generations, are actively choosing companies that align with their values.
However, ESG implementation must go beyond checklists. It requires genuine commitment, transparent reporting, and internal transformation. Boards must be educated. Executives must be incentivized. Employees must be engaged. ESG is not a side project. It is a leadership agenda.
Government can play a critical enabling role. By introducing consistent sustainability regulations, incentivizing green innovation, and supporting capacity building for SMEs, Sri Lanka can position itself as a responsible investment destination in the region. Collaboration between public institutions, financial regulators, industry groups, and academic bodies is essential to build a national ESG ecosystem.
Green capitalism is not about replacing profit with purpose. It is about aligning the two. Companies that embed sustainability into their business models are not sacrificing returns.
They are securing them. ESG is not a trend. It is the new language of value in the global economy.
