Which of the following is NOT a benefit of ESG compliance?

The correct answer highlights "increased regulatory obstacles" as not being a benefit of ESG compliance. Instead, compliance with environmental, social, and governance (ESG) standards generally aims to streamline practices and promote sustainable operations, which can often lead to reduced regulatory burdens in the long run.

Investing in ESG initiatives usually equips organizations to better meet existing regulations and anticipate future ones, resulting in more favorable business conditions. By adhering to ESG criteria, companies can improve their risk management, potentially leading to smoother interactions with regulators and avoiding costly fines related to non-compliance. Rather than increasing obstacles, effective ESG strategies often facilitate a clearer understanding of regulatory expectations.

In contrast, the other choices—cost reduction, reputational benefits, and capital attraction—are direct benefits associated with implementing ESG practices. Cost reduction can stem from increased efficiency and waste reduction initiatives, reputational benefits arise from enhanced public perception and credibility, and capital attraction is facilitated as investors increasingly favor companies that prioritize sustainability and responsible governance.