As companies become more aware of their impact on society and the environment and as we are dealing with challenges such as climate change and inequality, the topic of ESG (Environmental, Social, and Governance) has become increasingly important for businesses. ESG refers to a set of criteria used to evaluate a company’s performance in these areas. For those who are responsible for implementing ESG in their company, it can be a daunting task to even find a way on how and where to start. This blog post aims to provide you with a brief overview of what ESG is, the benefits of implementing it, and some ideas on how to do so effectively.
What is ESG (in general) and why was it established?
ESG simply stands for Environmental, Social, and Governance. These are the three main areas that companies are evaluated on in terms of their impact on society and the environment under the ESG framework as the concept was established as a way to measure a company’s sustainability and ethical practices. Additionally, it was created to help investors make informed decisions about where to invest their money, based on a company’s social and environmental impact, as well as their corporate governance practices. Think of institutional investors such as pension funds with a mission to invest in sustainable practices and using ESG to figure out where their investment can make both a financial return and a positive impact on our planet and society.
What is the difference between ESG and CSR?
CSR encompasses a company’s overall approach to social responsibility, including their philanthropy, community involvement, and employee volunteering programs. ESG, on the other hand, is focused on the company’s impact on the environment, the company’s impact on society, and governance practices. So there isn’t a clear “red line” where one concept starts and where the other ends. The concepts usually both work hand in hand, sometimes even with multiple teams working together within bigger organizations.
What are the benefits of implementing a sound approach towards ESG in your company?
Implementing ESG practices in your company can have numerous benefits. Firstly, it can help to attract and retain customers who are increasingly looking for sustainable and ethical products and services. Secondly, it can help to attract and retain employees who are looking to work for a company that aligns with their values. This is specifically true for younger workers, who tend to be more conscious about the impact of their own work on society and our planet. Third, it can help to reduce risk and increase resilience by identifying potential environmental, social, and governance risks and addressing them before they become major issues. Finally, it can help to improve the company’s reputation and brand value, which can have a positive impact on the company’s bottom line.
How can you implement it in your company?
When it comes to implementing ESG in your company, there are a few key things to keep in mind. Firstly, it’s important to create engagement and buy-in from leaders and employees. ESG is not something that can be imposed with a simple top down approach, it requires the participation of everyone in the company and we usually see it working much better if a more grassroots approach is established. Secondly, it’s important to set measurable goals and track progress over time. This will help to ensure that the company is making progress towards its ESG goals. Finally, it’s important to communicate transparently about the company’s ESG practices and progress. This will help to build trust with customers, employees, and investors.
A great idea to have an idea on how your company is doing with regards to ESG is the B Corp certification framework. Even if you don’t strive to get certified (the barrier is quite high), it’s a good start to understand the framework and the topics that you need to consider to push your company in the right direction. Another way to implement ESG in your company is to use the atlasGO wellbeing platform. This platform addresses employee wellbeing with regards to physical fitness, mindfulness, sustainability, and social impact. It does this by letting people engage themselves around these topics via challenges and community building and will help you to communicate your new strategy and goals, by including everyone to actively participate. This can be a great way to get employees engaged in ESG practices and to encourage them to make sustainable and ethical choices in their daily lives.
In summary, implementing ESG in your company can have numerous benefits, including attracting customers and employees, reducing risk, and improving the company’s reputation. To implement ESG effectively, it’s important to create engagement and buy-in from leaders and employees, set measurable goals, and communicate transparently. The atlasGO wellbeing platform can be a great tool to help get employees engaged in ESG practices. If you are interested in seeing our platform in action, reach out to us for a quick demo or by contacting us with your question.
Written by Olivier Kaeser