Gain insights from Marcus Gunn, our Head of ESG Product & Research, on boosting your business’s bottom line through ESG integration. Discover the benefits of incorporating ESG into your operations in this informative Q+A session.What motivated your organisation to incorporate ESG criteria into its operations?
Are there any specific ESG-related challenges you’ve encountered in the course of your work?
Yes – helping businesses to understand that they really do matter. Many businesses think ESG is for the biggest companies only, and it doesn’t apply to them. The fact is most economies are made up of over 90% SMEs with fewer than 250 employees, and they create over 60% of private sector jobs. Their engagement will make a far bigger difference than the companies currently grabbing all the ESG attention – and they can share the benefits too!
Do you think that ESG can actually help improve a company’s bottom line?
Absolutely – when ESG is used as a business tool first and a marketing tool second, there are clear pathways to improving performance, costs and client access, for example. The costs of developing and monitoring an ESG strategy are relatively low, much lower than engaging a consultant to chase questionable returns for you, and when ESG is embedded throughout the business the rewards are both tangible and intangible – what price a happy and energised employee base?
What advice would you give to someone starting out working on sustainability initiatives in their workplace?
Get help. A business may think it can work this out on its own but putting together an ESG process that will really benefit the whole company takes time, and requires structure and monitoring, just like any other corporate strategy. Many of our clients have started their own mission which has ended in confusion and fragmentation, adding little value in the end. Start simple, establish your goals, listen and communicate well.
How has the move towards increased focus on ESG impacted the way businesses operate today?
This is getting to a much bigger question of whether ESG is instrumental in a cultural re-alignment of business towards valuing purpose as well as economic success. ESG is a core component of businesses’ shift towards the culture of the ‘Triple Bottom Line’, or ‘The Four Ps’.
When it is communicated as a means to support its People and our Planet while not impacting Profit – the pre-conception of ESG as just some loose transitory trend loses credibility. If businesses move to operate along the lines of this model, it will be classified a success:
The Triple Bottom Line and the Four Ps:
What do you think are the key drivers behind the increased focus on ESG within businesses?
The main drivers are both carrot and stick: the carrot is in steady recognition that good ESG is a business benefit, the stick is that most businesses are part of a supply chain in which their customers are beginning to ask more detailed ESG information for risk mitigation purposes. Being prepared for this is a major incentive because it could cost you a contract these days.
Are there any potential pitfalls to incorporating ESG into business operations that sustainability officers should be aware of?
Good ESG is actually a process like any other operation. It is not a free-for-all and if treated as such it can disintegrate quite quickly, making it harder to pick up and restart.
Also to implement effective ESG a company has to migrate from using it as a shallow marketing tool to realising the substance behind it, which if properly structured can provide real benefits at the operating and personal levels of its employees.
TDH is your partner in ESG compliance. We make it easy to meet your evolving needs. Our experts provide a comprehensive range of services, from strategic advice to practical implementation, helping you to effectively manage the complexity and risks associated with ESG integration. For more information on ESG and how to incorporate it into your business click here.
