Research has shown that over the long-term businesses that have some sustainability or ESG focus outperform those that don’t. It’s now widely understood that having a sustainability or ESG focus protects financial value by managing a broad spectrum of risks, including regulatory risks and non-financial risks (those arising from failures in governance, or negative environmental or social impacts). That understanding is reflected in the efforts to develop a global framework for ESG reporting complementing financial reporting. The European Union has adopted a set of non-financial reporting rules for companies, which will come into force progressively. The IFRS, the non-profit organisation established to develop globally accepted accounting and sustainability disclosure standards, has published a draft sustainability disclosure standard which will be finalised in 2023 and the US Securities Exchange Commission is also developing a set of enhanced disclosures on ESG matters. Increasingly, if you do business in these markets, you’ll need to pay attention not only to disclosure standards but also to carbon emissions. The EU voted in 2022 to levy are carbon emissions tariff on imported goods that create environmental damage during production. While the details are being worked out, it provides fair warning that sustainability and ESG will play an increasing role in trade.