Explaining Environmental, Social and Governance and how it’s relevant to your business.
As business owners, we are all looking for ways to improve the future of our industries, people, and world. Environmental, Social and Governance or ESG for short, is a framework that enables business owners and leaders to implement strategies that will directly assess the impact of our businesses holistically.
Environmental
To create a place where we can all thrive, considerations of our business’s environmental impact involving aspects such as our supply chain, the energy we use, and our carbon emissions must be made.
Within an Environmental framework and strategy, businesses should also look to assess the world and local issues such as water pollution and scarcity, air pollution, deforestation, and greenhouse gases.
Many businesses aim to operate on zero waste models or go entirely paper-free. Following the COVID-19 pandemic, working from home has been a favoured way companies can help reduce their carbon footprint and air pollution by reducing employee commute times.
Digital innovations and lifestyle changes are paving the way towards greener working, especially in corporate office environments. However, environmentally friendly solutions may seem harder to attain if your business functions in an industry such as food production, manufacturing, haulage, or travel that often emit larger carbon emissions and have higher energy consumption.
ESG is fundamentally about measuring your impact and finding ways to reduce this where possible. It is also focused on continually operating ethically and fairly to not contribute negatively to pre-existing environmental issues, as listed above.
Social
Our workplace culture and wider contributions to society as an operation should be paramount, including the opportunities we offer and how we provide safe working conditions and protect and embrace our communities.
Businesses should focus on championing their people’s abilities and look to empower those they interact with outside of their immediate teams. Whether this is how they conduct themselves, market their services or embrace social change.
Key issues impacting the social element of ESG include managing customer success and their journey throughout their lifecycle in your business. Operating ethically and transparently and according to GDPR laws regarding Data Protection and security – ensuring all parties know how you store, process, and manage their personal information. Gender and diversity inclusion, implementing effective HR policies and staff training to educate and prevent discrimination. Community relations pertaining to your audience, customers, locally where you operate your business, and those your operations may directly impact. Mental health is also a subject that should be high on every business owner’s agenda to maximise employee well-being and improve company culture.
Governance
Governance equals best practice. Ensuring transparent reporting processes, ethical decision making and implementing diverse leadership hiring are all ways to deliver exceptional governance within your business.
ESG reporting has become a high priority to investors in which they can assess your business’s overall potential.
Even if an investment is not your goal, following the ESG framework can drastically improve your business operations, increasing turnover, reducing risks, and maintaining a positive culture.
Governance defines how you appoint your board of directors and whom the board is comprised; it also sets out executive compensation guidelines to make them fair and transparent to all. Other areas of the Governance framework include political contributions, venture partner compensation, recruitment, onboarding process, and overall best practices.
The ESG Outlook
Ultimately, ESG is about fighting the good fight and ensuring a better future for all.
As business owners and leaders, we are responsible for better changing the world and leading by example in our practices. ESG is gaining considerable momentum in the business world. However, the strategy and implementation of ESG are still relatively new for many business owners, and it can be challenging to assess where to begin.
At Sustain, we are committed to being an educational knowledge hub for all business owners and leaders looking to better impact the world in which we live. We know that making changes alone can feel daunting, and it is sometimes hard to understand how much you can contribute. However, together, we believe we can make a huge impact and change the horizon of business operations forever.
By implementing an ESG strategy in your business, you will begin to think more laterally about the decisions you make, the goals you set and the future you want. It is your responsibility to shape an ethically sustainable practice, and we aim to provide you with the tools to do so.
Our ESG Knowledge Hub is designed better your knowledge, answer your questions, and give you the resources to honour an ESG framework within your business. The Sustain team are also on hand to discuss and advise you on the best ESG practices as well as offer ethical insurance policies to suit your business’s needs.
Sign up for Knowledge Hub updates direct to your inbox.
