Introduction

As a result of economic development, citizens of most countries have been continuously migrating from rural to urban areas. According to the United Nations (2018), by 2050, 68% of the world population is projected to live in cities. When it comes to Asia, the current level of urbanization is relatively low, around 50%. However, it is projected to grow significantly as India and China continue developing (The United Nations, 2018). Since cities nowadays play a more critical role in our lives than ever before, it is our responsibility to ensure that they are governed safely and sustainably. The growing urban population is not a trend that
can be stopped; thus, society needs to adapt to it. In order to fulfill those needs, the idea of urban governance was born.

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What is Urban Governance?

Urban governance describes the complexity of governments in urban areas and the relationships between state agencies and civil society (Raco, 2009). Since the early 1980s, there has been a myriad of modernizations to the way cities are administrated. Many regions around the world have already seen changes in power, decision-making, and democratic representation. Moreover, the new style of governance puts a strong emphasis on active citizenship, community empowerment, and local government modernization. As a result, this unique management style hopes to bring power to previously neglected citizens and communities (Raco, 2009).

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Why are ESG Values Crucial to the Urban Governance?

Implementing the Environmental, Social, and Governance (ESG) values in the way urban regions are governed is undoubtedly not an easy task. The key challenges that modern cities need to deal with are mainly ensuring their sustainability, keeping those in rule in check, and working on persisting improvements. This process begins with the proper governance, as it is the responsibility of the leaders to not only implement the ESG policies but also constantly work on their enhancements (Zeng, 2021).

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Two crucial preconditions need to be present in order for ESG values to give satisfactory results and bring real change. Firstly, the strategy has to be a part of a more significant movement, but at the same time, it has to stay practical and not provide too much burden to existing and new operations. Secondly, policies need to be designed with flexibility in mind. In other words, procedures need to be adequate to different assets and stages of growth, as well as people with diverse training (Zeng, 2021). 

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Due to their complex nature, once ESG values are appropriately implemented, they influence the whole system of rule. This is the area where the ESG strategies are different from other corporate functions (Zeng, 2021). That is to say, ESG standards can be present in all kinds of areas related to urban governance, such as finance, architecture, construction, supply chain, urban planning, environment, and many more. Once the ESG values fully penetrate the system is when they are the most effective.

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Conclusions

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It is clear that due to the economic development and rural to urban migration, a way of managing cities has to improve. The realities of the 21st century vastly vary from what humankind adapted to in the past. Societies are more integrated than ever. For that reason, a new style of urban governance has to emerge. ESG is an umbrella term, and when it comes to city governance, it hopes to connect all of the important actors and industries.

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