What is ESG and why it matters?

First off, what does ESG stand for? Environmental, Social and Governance. It is a framework to evaluate how responsibly an organisation operates beyond just its financial performance. This matters because ESG factors are guiding how investors, consumers, and regulators view your organisation's long-term sustainability and ethical business practices. It can make the difference between your company's future growth or demise.

The way a business engages with nature is the main emphasis of the Environmental component of ESG. This involves evaluating its energy use, waste management, pollution, carbon footprint, product end of life, and greenhouse gas mitigation measures. Through innovation and sustainable operations, businesses with good environmental practices try to reduce their negative impact on the environment.

The Social component looks at how a business handles its connections with suppliers, customers, staff members, and the general public. This covers topics including community involvement, human rights, workplace diversity and inclusion, labor practices, and employee well-being. In today's digital economy, social responsibility also includes protecting consumers' data and privacy.

Governance is all about the internal structure and operation of an organisation. It includes the management, board structure, executive pay, ethics, and shareholder rights.  By ensuring accountability, transparency, and integrity in decision-making, good governance lowers the possibility of corruption or ineffective leadership.

In conclusion, ESG helps assess a company’s impact beyond profits, focusing on sustainability, social responsibility, and ethical governance. Embracing ESG principles builds trust, reduces risk, supports long-term success, and is now an integral part of retaining clients. Growing your market share in today's sustainability savvy market requires ESG transparency.