Why ESG has been a Big Deal for decades?
– And why your business should care now?
ESG—Environmental, Social, and Governance—has been a buzzword in the business world for years. But did you know it’s been on the radar since the 1970s?
While the concept of sustainable and ethical business practices goes back decades, it really took off in 2004, when the United Nations published its landmark report titled “Who Cares Wins.” This report highlighted how businesses could improve financial performance by focusing on ESG factors, cementing its role in the modern corporate world.
So why should you care about ESG today? The simple answer is that it’s no longer just about doing the right thing—it’s also about creating long-term business success.
Why Should You Care About ESG?
For businesses, ESG is no longer just a nice-to-have. Investors, consumers, and even employees are increasingly looking at companies through an ESG lens. A recent survey found that over 70% of consumers prefer to buy from businesses with sustainable and ethical practices. By adopting ESG principles, companies can enhance their brand reputation, build customer loyalty, and open new market opportunities.
Moreover, investors are paying attention. ESG performance can influence investment decisions, as it’s often seen as an indicator of a company’s risk management and long-term sustainability. Poor ESG practices, on the other hand, can harm a company’s reputation and even affect access to funding.
The Impact on Your Business
Environmental practices (the ‘E’) might involve how much energy your business uses or how you handle waste. Making simple changes, like switching to eco-friendly packaging or reducing energy consumption, can make a big difference and appeal to today’s environmentally conscious consumers.
The social aspect (the ‘S’) involves how your business treats people—employees, customers, and the community. Fair wages, a commitment to diversity, and community engagement initiatives are increasingly becoming non-negotiable. Consumers want to know that businesses care about more than just profits.
Finally, governance (the ‘G’) relates to the way your company is run. Are your practices transparent and ethical? Good governance builds trust and ensures your business operates responsibly and compliantly.
Moving Forward with ESG
Understanding ESG isn’t about ticking boxes—it’s about creating a more resilient and sustainable business. It offers a roadmap for better decision-making, risk management, and reputation building. By starting small and integrating ESG principles into your operations, your business can create lasting value while doing good for the environment, society, and the economy.
The future of business is ESG. Are you ready to take the next step? There's a toolkit you can download below:
CTA - ESG Toolkit
Published - 09/09/2024
