What is ESG?

There’s a lot of talk floating around on the web about how important those three letters are… But what actually is an ESG proposition? 

Everything you do has an impact. And everything your business does has an impact too. This is what ESG is all about. Environmental, social and governance (ESG) concerns are inherently interlinked with your business, so technically we all have an ESG proposition whether we realise it or not… We just don’t all have a strong one. 

It’s becoming more and more pressing that organisations publish data on their ESG. This is called ESG reporting. 

Consumers, employees, investors, and stakeholders alike have growing concern about the big issues facing society today. We all have the ability to act responsibly as individuals, which means that if organisations want our time and money, they need to be as transparent as possible about their proposition.

Here’s some info on each of the criteria…

• E stands for Environment. Just like every single person, every single business’ actions have an impact on the planet. The E criteria relates to the amount of energy a business uses, how much waste it creates and how much that affects the planet. Your company’s carbon footprint and impact on the climate emergency would be included here. 

• S stands for Social. This relates to employee wellbeing, diversity inclusion, and health and safety. It’s not just about the internal workings of your company, though. Social criteria also applies to the relationships your company has with the outside world and your local community. 

• G stands for Governance. Without this your company wouldn’t operate. Governance is like your business’s internal organs. They’re there, we just don’t think about them all the time (unless you work in operations). All the practises, procedures and policies you have in place are part of the governance criteria. It also relates to how your company complies with laws and regulations and adheres to the needs of its stakeholders.  

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Where do our sustainability and employee wellbeing policies fit in the ESG proposition? 

That’s a good question. It’s arguable that a lot of these things overlap. Like we mentioned above, without governance, most of the stuff in your business wouldn’t exist. Your sustainability policy has elements of E, S, and G. We’ve put together a Venn diagram with a few examples to illustrate just how much overlap there is. 

You could lose money if you don’t have a decent ESG proposition.

Using the diagram above, we could put together a pretty good case as to why you’d want strong ESG if you want to keep your employees and clients happy. But there’s a lot more data to back this up! Read about why ESG should be part of your wellbeing strategy in our next article.