What is your organization’s stance on current world and social issues? From resource management to economic inequalities to workplace inclusion, how are your broader values woven into your communications?
More and more businesses are adopting a new approach to demonstrate to employees, consumers and stakeholders what matters most to them on a human level. An environmental, social and governance (ESG) strategy breathes life into your core values while meeting the ethical expectations of your audience.
In a nutshell, ESG is broken down into:
- Environmental, examining business performance in terms of the natural environment, including management of waste, carbon footprint and sustainability
- Social, focusing on human rights and how a company treats others, including health and safety
- Governance, relating to the standards of how a company is accountable and transparent in carrying out its mission
ESG is often considered the exclusive purview of large corporations, but businesses of all sizes can benefit in many key areas:
- Improve customer loyalty. Did you know that 79% of customers changed their purchase preferences based on environmental impact, social responsibility and inclusiveness? Consumers are paying attention, and they’re inclined to support brands that promote a sense of social and environmental responsibility.
- Boost employee engagement. With an ESG strategy, you can position your business for sustained growth and efficiency. When companies prioritize ESG initiatives, employees are often more invested and motivated. In fact, there’s a 175% bump in productivity when your organization’s ESG values resonate with your staff.
- Score points with investors. An ESG strategy can also help entice potential business investors as they evaluate your company. They’re increasingly considering ESG criteria in their decision-making. Fifty-six percent have either refused to enter into an agreement with a partner or turned down a potential investment on ESG grounds.
- Increase your cost-effectiveness. An ESG strategy makes more financial sense. Companies that promote sustainability and social responsibility tend to be more efficient, reducing overhead expenses. A McKinsey report revealed ESG goals played a significant role in cutting operating costs and increasing profit by up to 60%.
Take a stand you believe in
Similar to corporate social responsibility, an ESG strategy can highlight the ethics of your company, communicating its meaningful social differences.
Because to quasi-quote Alexander Hamilton, “If you stand for nothing, what will you fall for?”
To get started, look for opportunities to advance sustainable practices. What’s not being done in your industry that could set you apart? Define what you want to achieve on the ESG front. Get everyone on board from the top down — senior leaders, HR, communications and more — to gain a unique perspective and company buy-in.
Then, look for opportunities to share your stance and communicate leadership. From your website to social media to webinars, how can you reach a larger audience that appreciates social impact and sustainability?
Remember, silence makes a statement, too
Today, people are growing more aware of how their actions impact the world around them. Consumers and investors prefer to do business with companies that are vigilant of the greater world. And employees strive to work for employers that align with their socially responsible values.
Developing an ESG strategy and communicating it is more important than ever. Take a stand and fulfill the ethical and moral obligation that can benefit your company now and into the future.