Integration of ESG in the Context of the Social Contract: Relations Between the State and Society in the Modern World

ESG and its Significance in Relations between the State and Society

In the context of this article, it is worth mentioning the growing role of ESG (Environmental, Social, and Governance) - environmental, social, and corporate aspects in relations between the state and society. ESG principles take into account the environmental, social, and corporate aspects of companies and government bodies' activities, which aim at sustainable development and maintaining social well-being.

a. Environmental Component

The environmental aspects of ESG focus on the necessity of taking measures to protect the environment and combat climate change. Following the principles of the social contract, the state should consider society's needs to preserve natural resources and protect the environment for future generations.

b. Social Component

The social aspects of ESG deal with issues such as social justice, equality of opportunity, working conditions, and human rights protection. Within the framework of the social contract, the state is obliged to provide citizens with access to quality education, healthcare, and social goods, creating conditions for achieving equality and reducing inequality.

c. Corporate Component

The corporate component of ESG includes transparency and fairness in governance, as well as combating corruption and abuses of power. The state should strive for transparency in its activities, ensuring compliance with rules and regulations, and preventing corruption and abuses at all levels of the administrative system.

Practical Tools and Methods for Implementing ESG Principles

The following tools and methods can be used for effective implementation of ESG principles and the social contract:

• development of national and international ESG standards;

• implementation of corporate social responsibility and reporting systems;

• training and upskilling specialists in the field of ESG;

• conducting monitoring and evaluation of ESG indicators;

• creating platforms for collaboration between the state, business, and society in solving ESG issues.

Historical Examples of Successful Implementation of the Social Contract and ESG Principles

There are several historical examples of successful application of the social contract and integration of ESG principles.

1)    China: In recent decades, China has actively integrated ESG principles, especially in the field of ecology, into its economic and social policy. The country has set ambitious goals in the field of renewable energy sources, aiming for carbon neutrality by 2060. Progress in the social sphere and corporate governance is also worth noting.

2)    Russia: Despite difficulties and challenges, Russia is also striving to implement ESG principles. In recent years, the country has made certain progress in the development of renewable energy sources, especially in the field of wind energy and solar energy. Environmental programs and projects for biodiversity conservation are actively developed in several regions. Major Russian companies such as Gazprom, Rosneft, and Sberbank are also starting to integrate ESG principles into their activities and corporate governance.

3)    European Countries (Sweden, Denmark, Norway, the Netherlands, Germany, the United Kingdom, Switzerland): In many European countries, the social contract and ESG principles have been successfully implemented. Scandinavian countries such as Sweden, Denmark, and Norway hold leading positions in global rankings for social development, environmental sustainability, and corporate reporting. The Netherlands and Germany actively develop sustainable development, innovations in urban planning and infrastructure, as well as renewable energy sources. The United Kingdom and Switzerland stand out with high levels of social protection, environmentally sustainable practices, and strict legislative requirements for companies.

4)    Costa Rica: This country demonstrates successful implementation of ESG principles in a developing economy, investing in education, healthcare, and environmental sustainability, which contributes to the well-being of the population and the preservation of biodiversity. Costa Rica has also banned the extraction of gold and certain types of metals, recognizing the importance of natural resources for its national development.

5)    South Korea, Japan, Singapore, India, etc.: Many Asian countries are also successfully integrating ESG principles into their economic and social policies. South Korea and Japan are world leaders in the field of innovation and the implementation of environmentally sustainable technologies. Companies such as Toyota and Panasonic, Samsung, and LG are global leaders in the field of innovation and the implementation of environmentally sustainable technologies. Singapore actively develops green technologies and infrastructure, aiming for sustainable urban development. In India and other developing countries of the region, the implementation of ESG principles continues, especially in the field of renewable energy, social development, and corporate governance.

7)    Canada: Canada actively invests in renewable energy sources, energy efficiency, and green technologies. The country also emphasizes social development, including affordable housing, education, and healthcare, which contributes to successful collaboration between the state, business, and society. Canada is also taking measures to protect the rights of indigenous peoples and preserve the environment, including banning certain types of plastic products and implementing programs to raise environmental awareness.

Global and International Aspects of the Social Contract and ESG Principles

In a globalized world, the social contract and ESG principles are becoming increasingly relevant in an international context. International organizations such as the UN, the World Bank, the International Monetary Fund, and the International Labour Organization play a key role in promoting ESG principles and sustainable development at the global level.

Key international agreements and programs, such as the UN's Sustainable Development Goals and the Paris Agreement on climate change, underline the importance of cooperation and coordination of actions between countries to achieve common goals in the areas of ecology, social development, and corporate governance.

An important tool for cooperation are international standards and recommendations on ESG, such as the UN Global Compact and the Principles for Responsible Investment (PRI). These initiatives aim to create common approaches and practices for states, companies, and investors in the field of sustainable development, environmental and social responsibility, and transparency in corporate governance.

Cross-border and regional projects and partnerships, such as the European Union, the African Union, and ASEAN, also play a significant role in the dissemination of the social contract and ESG principles. They contribute to the integration of economic, social, and environmental aspects of development, strengthening regional cooperation and sharing of experiences and knowledge between countries.

At the same time, the implementation of the social contract and ESG principles at the international level faces a number of challenges, such as global economic imbalances, differences in the level of development of countries, political, and cultural disagreements. These issues require further work and cooperation on the international stage to find joint solutions and strategies that promote the implementation of the social contract and sustainable development on a global scale.

Conclusion

In this article, we have examined the historical roots and modern problems of governance in the context of relationships between the state and society, as well as the role of ESG principles in the implementation of the social contract. Understanding the importance and features of the social contract, which is based on responsibility, fairness, and cooperation between the state and society, is an integral part of the successful functioning of the state and ensuring the welfare of the nation.

The integration of ESG principles into state governance and corporate activities allows taking into account environmental, social, and corporate aspects when making decisions, thereby promoting sustainable development and harmonious relationships between the state and society. It also motivates citizens to actively participate in the political process and monitor the actions of authorities, ultimately helping to prevent abuses and maintain social balance.

In a modern world where challenges are becoming increasingly complex and interconnected, special attention should be paid to ESG principles and the social contract to maintain stability, fairness, and sustainable development on the international stage. Only cooperation and mutual understanding between the state and society, based on adherence to these principles, can guarantee successful coexistence and the well-being of nations.

Therefore, the recognition of the need for the integration of ESG principles and the principles of the social contract into political and economic processes is of paramount importance for states and societies. It is crucial to adhere to and promote these principles at all levels of governance in order to ensure equality, social justice, and sustainable development.

In light of the changes and challenges posed by the modern world, such as climate change, global inequality, and technological progress, the implementation of ESG principles becomes even more important to maintain harmony between the state and society. Responsible governance, active citizen participation, and cooperation between the state and society are key factors in tackling these challenges and ensuring a sustainable and prosperous future for all.

Thus, in conclusion, it can be said that successful implementation of the social contract and integration of ESG principles into managerial and corporate processes are crucial to maintain social balance, sustainable development, and harmony between the state and society.

Adding to this, the most significant aspect of ESG reporting is its component criteria. The supremacy of pseudo-democratic principles, in which minorities determine the direction and impose their views on the majority, creates an imbalance in the formation of the ESG agenda. A more detailed examination of these points will be presented in subsequent publications.