Why ESG is important for businesses (and consumers) …
ESG is probably terminology that few of us will be familiar with outside of the financial sector… It sounds dull, complicated, and yet another thing we ‘should’ be thinking about…
It stands for Environment, Social and Corporate Governance (ESG) and originated as an investment philosophy which considered the standards of social responsibility when evaluating a company for investment… in basic terms it is an evaluation of a company’s collective conscientiousness for social and environmental factors using three main pillars.
I can already sense people switching off!
BUT…
Keep reading people…
ESG is important for businesses. Thinking about and incorporating an ESG strategy into your business is becoming vital for the sustainability of the business model as well as the all-important profitability.
ESG is fast becoming recognized as an essential way of evaluating the social conscience of every business, areas of operational and enterprise risk that may not have previously been considered, and way of accessing a new client base…
SO…
Whether you’ve never heard of ESG, have a vague recognition and understanding of it, only think it is relative to hedge funds, or think of it as a ‘nice to have’ within business; you need to start sitting up and taking notice, as ESG is increasingly being seen as an essential part of business strategy planning, sustainability, and risk management.
In short, a company thinking about the three ESG pillars in terms of its own survival and longevity, will be the company that outlasts the majority of its competitors…
ESG as a consumer…
We all, as ‘consumers’, should be starting to think about and look at the ESG credentials of the companies we buy goods and services from. The power we have as a ‘consumer’ is often forgotten and overlooked but we have a huge amount of collective power.
None of us wants to actively damage the planet, and if given an option we try to choose the right thing, so by starting to pay attention to the ‘greenness’ of a company when we buy its products or services, and asking about its ESG strategy and initiatives, we immediately start having an impact.
By choosing a company with an implemented ESG Strategy and Initiatives over a company without these, we are effectively utilizing our consumer power and voting with our wallet.
When to consider ESG as a business…
ESG is a framework for conscious consumerism. It helps businesses attract investors, build customer loyalty, improve financial performance and make business operations sustainable, which means the time to start considering an ESG Strategy for your business is now…
Implementing ESG…
The intricacies and practicalities of implementing ESG are varied. ESG will mean different things for different businesses, sectors and industries… it is really important to remember that one size does not fit all, AND you cannot implement an ESG strategy overnight!
The key to ESG implementation is taking a step back to really understand what the real goals are for each ESG pillar, and then for the business strategy and model as a whole. The goals need to be achievable, definable, and measurable; they cannot simply be a generic ‘being green’ for example. Breaking the goals down into achievable steps and deadlines allows for development, planning, accountability, scheduling, and costing.
Once defined these goals need to be agreed and owned by the business before being incorporated into the overarching Business Strategy and Business Model.
The impact of not considering and incorporating ESG into businesses is growing, make sure you don’t get left behind!
For more green tips and inspiration take a look at our other blog posts, or pop over to Instagram and LinkedIn and check out @achievinggreenness where we provide you with the motivation, evidence, and tools you may need to become greener.
If you are a business looking for help to develop and implement an ESG Strategy then get in touch, we offer a bespoke Green packages for all your requirements.
