There is a growing global and local focus on Environment, Social and Corporate Governance (ESG) and the critical part businesses should play. ESG requires businesses to consider the environment, society, and governance in their decision-making, with an emphasis on responsible and sustainable practices, all to create long-term value while considering the broader considerations of improving the environment, the community, and society in general.
Larger organizations are being moved to legal disclosure of their ESG policies and their implementation progress in their annual reports. These organisations will also be required to make accounting disclosures in their annual accounts to show their impact on the environment.
There are many ways for organizations to become ESG compliant, including certification. One example of ESG certification is the “Benefit Corporations” (B Corps). These are certified by the non-profit organisation B Lab and must commit to meeting high standards of social and environmental performance, accountability and transparency. Certified B Corps envision a better economic system and aim to balance profit with purpose in their decision making, resulting in benefits for people, communities and the environment.
The Importance of ESG
A business mentoror coach can assist business leaders in considering and addressing the importance of ESG for their own businesses. Businesses committed to ESG have seen great results, such as committed and motivated employees, increased customer and supplier loyalty, higher levels of innovation, and market leadership.
Companies become ESG compliant for many reasons, such as:
· Required ESG compliance by their suppliers or customers to do business
· Legal requirements to be ESG compliant and disclosure requirements
· Market and community credibility
· Aligning their business with their own values
· Gaining marketing advantage with end consumers
ESG is a real magnet for talent, allowing organisations to attract and better retain motivated people who are aligned with the business’s values and attracted to doing some good in the world.
ESG implementation is predicted to progress further in 2024 and beyond. With the impact of climate change now a critical issue, businesses are expected to be a substantial part of the solution. By seeking out business mentoring or coaching, businesses can get the assistance they need with ESG.