ESG, The New Bottom Line
6 reasons why your organization should adapt
An Environmental, Social and Governance (ESG) report sounds complex, but it’s based on basic non-financial fundamentals your company already has, whether or not you’ve decided to share them publicly.
Profits and losses and your company’s financial strategy are important factors in an investor’s decision to add your company to their portfolio, but more and more, investors are factoring in a company’s ethical and values-based track record in their decision-making process. In fact, evidence is mounting that the financial performance of companies corresponds to how well they contend with ESG issues. A substantial body of research shows that companies that manage ESG issues well achieve superior financial results.
Environmental:
Energy and water use, waste and recycling, pollution, life cycle impacts of products, natural resource conservation and treatment of animals
Social:
Human rights, business relationships, labor practices, talent retention, healthcare, pay equity, product safety and data security, commitment to volunteerism and the community
Governance:
Board diversity, executive pay, lobbying practices and business ethics
An ESG report arms customers, consumers, potential investors and other various stakeholders with a comprehensive look at your company’s values, ethics and everyday actions. Think about how often you see a company on the news because of its mistreatment of workers, negative impact on the environment or lack of transparency. An ESG report is an opportunity for an organization to tell its own story proactively. Often companies react to negative press too late, and are forced to take a defensive stance to repair their reputation in the public sphere. An ESG report serves as an investment in avoiding miscommunication and preserving your hard-earned corporate identity in an ever-changing market. No one knows what your company does and how you do it better than other organizations, and your ESG report should be viewed as a personal statement in solidifying your company’s position in the world.
