Guest Post: The Business Benefits of Improved ESG Performance

By: David Picton, SVP of Sustainability at Alcumus

Having robust and credible ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. (EnvironmentalEnvironmental criteria consider how a company performs as a steward of nature., SocialSocial criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. and GovernanceGovernance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.) policies in place has never been more important for organisations. According to the latest research from PwC, 83% of consumers think companies should be actively shaping ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. best practices and 91% of business leaders believe their company has a responsibility to act on ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. issues.

Companies that fail to implement an effective plan risk falling behind competitors and damaging their reputation with stakeholders, suppliers and consumers. This could have serious consequences for their long-term future.

In additional to the reputational risk, failing to manage resources effectively, reduce carbon output and adopt more sustainable processes could have serious consequences for the planet. This is a topic all business leaders need to be across. In the first of our three blog post series on this issue, we look at the latest ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. research and the impact of ethics on business’s success.

Organizations are realizing that focus on ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. strategies is an irreversible global trend, and without meaningful ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. policies, actions, and standards, they will struggle to attract and retain employees, customers and investors.

Why the focus on ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments.?

It is no longer acceptable for organisations to simply be focused on delivering profits. Numerous studies have shown that acting responsibility and considering the long-term impact of their operations is key. From consumer and employees to investors and governments, all are becoming increasing concerned with sustainability, and this is affecting their views and choices.

Here are just a few reasons why effective ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. polices are so important:

92% of consumers are more likely to trust a company that supports socialSocial criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. or environmentalEnvironmental criteria consider how a company performs as a steward of nature. issues (Cone Communications LLC: Porter Novelli)53% of people won’t work for a company they consider to be unethical (Robert Half Talent Solutions)73% of investors state efforts to improve the environment and society play into their investment decision-making (Harvard Business School)

In 2021, our own research with organisation across the UK, US and Canada[1] uncovered the following:

90% of companies have added ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. into their corporate strategyTwo thirds state that this has had a significant impact on their businessTwo thirds are already investing in systems and technology to capture ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. dataHowever, half of those survey felt discouraged to invest in this area more

The fact that such a significant proportion of companies feel deterred from investing further is very worrying. It points to the fact that decisive ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. leadership is needed to make sustainability happen.

What are the ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. factors that organisations should address?

ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. covers a wide range of areas from working towards net zero through to supporting community projects in your local area. There is a growing need to show that your business is concerned with more than just profit and that it has the right ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. considerations in place to make a difference to those directly and indirectly impacted by your actions.

Your ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. metrics should take into consideration the following areas:

EnvironmentalEnvironmental criteria consider how a company performs as a steward of nature.

Protecting the environmentReduction of your carbon footprintMaking the most of natural resourcesBetter waste managementEncouraging biodiversity

SocialSocial criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates.

Developing talentEquality, diversity, inclusionSupporting the health, safety and wellbeing of employeesCSR

GovernanceGovernance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.

Corporate governanceEthical activitiesSustainable procurementModern slavery

ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. strategy – what are the challenges?

While we know from our research that the impact of ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. is felt more keenly in larger organisations that have more than 250 employees, the ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. statisticsshow that all companies are affected in some way.

65% of those who responded said the impact was large or very large, this rose to 73% for those working in organisations with more than 250 employeesTwo thirds believe that this impact will rise in the next few yearsOverall, 53% have already invested ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. systems, with 57% of larger organisations already taking this step66% of those that don’t have a system state that they are looking to introduce one

However, just having a system in place does not solve all the issues. Things like more flexible working practices, integration with other IT systems and control and visibility across supply chains all present challenges to ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. reporting requirements.

How an ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. focus provides commercial benefit

There doesn’t have to be a tension between ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. initiatives and benefits to the bottom line. An effective ESG programme should prompt people to think about their behaviours and find better processes that benefit all concerned.

These can include:

Cost savings: Improved waste management, better use of resources or more careful considerations around how and when employees travelIncreased sales: Both business and commercial customers both want to buy from organisations with clear sustainability policiesAccess to finance: Financial institutions are increasingly concerned with ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. and look more favourably on those with compelling ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. programmesMeeting expectations: there are more legal requirements to publicly disclose ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. policy and these will only increase with the push towards net zeroEmployee engagement: Employees increasing want to work for organisation who are committed to delivering on an ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. agenda, taking action to back up their words

The organisations that will thrive in the future will be those that take sustainability seriously, recognising that is more than a tick box exercise. Committing wholeheartedly to working responsibly makes commercial as well as ethical sense. An effective ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. strategy is now a must-have for all companies.

The time to act is now. Post-pandemic, many are using the situation as a catalyst to revisit the viability of their business models and make changes to thrive in the future.

There is a clear focus on building back better and companies must work to make it happen.

Find out how our ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. solution can work for your business

About the author:

David Picton is SVP of ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. and Sustainability at Alcumus. Now working with customers across multiple sectors and specialist organisations, he is a former Chief Sustainability Officer and was an original Board member of the Supply Chain Sustainability School. David also achieved the Queen’s Enterprise Award for Sustainable Development, and presented on the benefits of responsible business to the UN’s Conference on Trade and Development.

[1] Online survey with a sample of 621 businesses (207 in each of US, Canada and UK) conducted between 28 September and 11 October 2021 among senior managers working a role which demands knowledge of ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. or Sustainability requirements or processes for the business

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