ESG - Why is it so important?
Why do some companies perform better than others? Why are they standing out to customers? What key factor are investors increasingly looking at? The answer is ESG (Environmental, social and corporate governance). Navigating this fast-changing landscape can be difficult, time-consuming, and costly, and we believe we have found an innovative way to differentiate yourselves from the rest.
No longer can companies be half-hearted towards ESG matters, or give unfounded statements which have no meaning, they must now give true focus to their ESG framework. There is a multitude of reasons why ESG is now more imperative now than ever, but you don’t have to look past COVID and the climate crisis to understand why customers, employees, and investors place such importance on sustainability and ethical practices. COVID has made investment more frugal and customers warier, consequently they look to businesses that can weather any storms which may arise in this turbulent world. The climate crisis is also top of the current agenda, whilst everyone does their part to transition to net-zero.
Neglecting ESG instantly puts your business at a disadvantage over competitors. The evidence of the intrinsic link between ESG performance and financial performance is clear and unequivocal, businesses must now pursue sustainable and ethical corporate practice. Strong ESG framework demonstrates the long-term value of the business and its resilience to future events, consequently, investors and customers are actively seeking organisations that can prove their commitment.
What makes an attractive investment? Traditionally investors would look to financial factors when making these decisions, these factors still play the principal role in decision making, however, nonfinancial factors that impact business outcome are increasingly important. Investment in business is far more frugal, failure to demonstrate and communicate ESG ethics and values could dimmish investor interest in your company. If your ESG framework is not strong and sustainable, this could be a quick decision-making factor which potential investors. Why leave your company open to this scrutiny?
Customers and clients place more and more trust in companies that demonstrate ethical practice, if a company is seen to act in a manner detrimental to the environment or other social governance factors, public trust will erode. Demonstrating this commitment to an ethical ESG framework is more important now than ever, customers and clients will want to know this.
ESG Direct is a new and innovative way to manage all of your ESG communications and compliance in one online Hub making the process far quicker, efficient, and more accessible to third parties. ESG Direct allows for greater awareness of your ESG framework to third parties, this should create better engagement with customers, investors, and any other party who may be interested. We have great confidence in this and we are sure you will too.
If you think this is something that could benefit your business email us to learn how we can help with your ESG mission and check out ESG Intercom.