by Amanda Hayward
You may well have heard the term ESG, you may well have read about ESG guidelines, but did you know that by 2025 all business will need to report on this topic with the current suggestion that this could be brought forward?
So, what are ESG’s?
ESG is for short for Environment, Social and Governance and is a set of guidelines that measures a businesses’ impact on the environment, society and the way that the business is run. It is set as a global benchmark of how a business operates.
The three elements comprise of:
Environment – How does the business manage its impact on the environment? It can include reducing its carbon footprint, having robust recycling and waste programmes, taking steps to becoming a net zero organisation and using greener products.
Social – This looks at how a business looks after their employees, ensuring they invest and partake in fair and equal opportunities, provide training, and supporting health and wellbeing within the workforce. It also looks at ethical business practices, and whether all supply chains comply with labour rights and are free from modern slavery.
Governance – This concentrates on how a business is run, including the logistics and decision making. It covers how well a business reports to stakeholders, ensures the business trades ethically and displays diversity and inclusion throughout the workforce. Good governance in a business is key to attracting investors and can help businesses grow.
It also covers how transparent a business is in its operations in relation to the social and environment elements of the ESG guidelines.
By adopting a strong ESG framework, it will show potential stakeholders, clients, customers, and contractors that you adapt good ethical and transparent business values.
It is important to remember as you develop your ESG strategy that is sits within your business strategy and it isn’t an add on.
A Company that promotes a robust ESG strategy is not only more appealing to investors and stakeholders, but studies have shown that they are more attractive to prospective employees.
Once an ESG strategy has been developed it is important to review and update, to ensure your business remains aligned with your expectations.
2025 may seem a long way away, but with the increasing focus and talk around ESG now is the time to act.