For corporations to be sustainable long term, environmental, social and governance factors (ESG) are of a heightened concern. This ensures business alignment with proper treatment of the planet, equitable and fair workplaces, and transparency in practices.
Sustainability has been proven to be financially successful and ethical. Global sustainable investment stood at more than $30 trillion at the start of 2018, a 34 percent increase in two years, found the Global Sustainable Investment Alliance.
What is ESG?
The E pillar in ESG stands for environmental criteria. This pillar relates to how organizations and businesses measure, commit and act to reduce their environmental impact and develop sustainable offers. This includes how efficiently a company uses energy sources and how it discards waste and emits polluting gasses across its entire value chain.
This pillar works to promote conscious consumption of resources, biodiversity preservation actions, and lower greenhouse gasses emissions that cause climate change. The environmental dimension also works to minimize the use of non-renewable natural resources and the impacts of harmful environmental practices, such as deforestation.
The S in ESG represents the social dimension of responsibility. This pillar ensures fair and equitable treatment of people and transparency of business practices. Topics like human rights, diversity and inclusion, employee engagement, workforce training, and labor policies fall under this pillar. The social dimension supports the rights and safety of employees, including making sure that workplaces are fair and ethical.
The Governance dimension, the G of ESG, is about how a corporation is managed by leadership, management and partners. This pillar ensures independence of the board and proper structures of tax audit committees. Corporations are monitoring for complying with laws and meeting the needs of stakeholders.
Every pillar has ethics and transparency at their core. Governance monitors the relationship between senior management and other employees, as well leader remuneration policies. It looks at the diversity in boards of directors and means to prevent corruption, such as official complaint channels. It also encompasses transparency with consumers and society about business practices. This includes having more transparent and open relationships with communities and stakeholders involved in the production process.
Why is it so important to integrate ESG criteria in your company?
ESG criteria has multiple benefits for companies, investors, employees and consumers through heightened awareness of business impacts. ESG priorities put the focus on sustainable, ethical and transparent business practices.
Stakeholders care about how a company impacts the community, society as a whole, and our planet. While changing consumer demands are favoring sustainability, with ESG goals in line, investors see long-term added value of better financial performance. Strong ESG priorities can help manage investment risks, positively affect return on investment (ROI), and reduce lending and revenue risks. Investors see better financial performance with added long-term value.
Human rights and labor standards is an essential consideration and increasingly important for the workforce. Engaging employees and stakeholders creates more satisfaction and better attraction of talent.
Choose to become an actor, today
Failing to act on sustainability is now starting to result in financial consequences, such as carbon taxes. Environmental considerations can span from raw material sourcing, using organic or fairtrade suppliers, to considerations of how the corporation is impacting the land it’s on and potential problems of air and water pollution.
Investing in innovative and sustainable product developments leads to a business compatible with a carbon neutral world. While leading through sustainability and care for people and the environment can build a stronger corporate brand.
Creating company cultures that support people and are safe and equitable will result in longer term retention and productivity. This includes adequate training and education programs, employee engagement and input consideration, and having a socially beneficial mission statement. Sustainable practices can additionally attract new talent, boost morale, and build stronger relationships with communities.
Governance standards can be employed through careful considerations of board composition, audit committee structures, and executive compensation. Transparency is a key in investing in ESG, including being transparent about political contributions and lobbying. Enabling whistleblowers and complaint lines strengthen governance through protection from bribery and corruption.
With the Go Green program, Bollé Safety is committing to the most rigorous standards of environmental performance, by focusing on research and development to use more sustainable technologies and raw materials, among many eco-conception initiatives.