If there’s one thing we need to remember, it’s that we’re all responsible for looking after the planet.
And, we mean ‘all’ - it shouldn’t just stop with individuals.
Now more than ever, it’s incredibly important for businesses to get involved, which is why so many of them have started to make sustainability such a huge part of their operations.
And, that’s where ESG - Environmental, Social, and Governance - activities come in.
Environmentally, this not only includes their response to climate change and waste management, but to CO2 emissions and water, air and energy pollution too.
Socially, they look at inclusion, diversity, human rights, employee wellbeing, data protection and community development.
Governance, then, looks at factors like leadership selection, the composition of the board of directors, etc.
For lots of today’s investors, these are all super important when deciding whether they should invest, and that’s why Sustainability Reports have become an important part of their accountability mechanisms.
While CSR - Corporate Social Responsibility - is defined as the ‘way through which a company achieves a balance of economic, environmental and social imperatives while at the same time addressing the expectations of shareholders and stakeholders’, ESGs should be seen as way more than just some box ticking activities.
Far more modern and more practical, ESG will involve thinking outside the box, and shifting away from CSR.
More and more, companies are making their ESG activities sustainable, and bringing them to all parts of the business.
For example, in March 2021, activist firm Engine No. 1 called for the removal of Exxon Mobil directors for ‘destroy[ing] shareholder value and generat[ing] significant long-term risk for investors’. And, by June 2021, they got rid of another member in an attempt to get this oil giant to do more to help climate change.
Of course, companies can profit while still having a fantastic, sustainable approach to their economic, social and governance structures.
In fact, looking at operations management from this angle is exactly what the future looks like for most businesses.
While many investors are still unsure about the profitability of sustainable-led businesses, creating awareness and releasing transparent reports are helping them to fully understand the benefit of ESGs, not only in business, but in society too.
Going forward, ‘impact’ should be a keyword for businesses and investors when looking at the issue of sustainability.
Adopting ESG principles will help with growth and will create a safer environment.
We are all stakeholders when it comes to issues of sustainability, so we all have a responsibility to encourage businesses to work sustainably.
Only that way will we all be doing our bit to help protect the planet.