For corporations, taking into account issues of Environment and Social sustainability is becoming increasingly important. PwC, a professional services firm, held a webcast this week to discuss trends relating to ESG (Environment, Social, and Governance).

The panelists discussed both the current state of ESG in corporations as well as the zeitgeist of the future business atmosphere. In a survey conducted among 103 Private Equity firms world-wide, PwC found that a majority (around 80%) of the firms had developed internal policies on environmental and social issues, presently.  This percentage dropped when considering the decisions PE firms make about investments and was only at around 50% for the number of PE firms that disclosed distinct sustainability activity to its investors. The PE firms identified that these numbers were in flux and that in the next couple of years, the role of ESG principles would be even greater.

The importance and advantage of these investments resides primarily in cost savings and risk mitigation as well as the indirect value of image. Corporate valuation of ESG principles is now widely acknowledged. This is evidenced by both NASDAQ and NYSE joining the Sustainable Stock Exchange Initiative and the fact that among Bloomberg and Google Finance’s key stats are numbers relating to companies’ performance in environment and social areas. Increasingly, other indices ranking companies and their sustainability are also being used.

One of the main indicators of this change is the investor pressure on corporations to consider social and environmental issues.

The big take away: It is no longer economically smart to not take ESG issues into account when corporations are conducting their day to day business, and for the most part, companies know this.