ESG, always room for improvement
What three words are on your mind? The location identifier words? The three words that keep popping up in my mind, as they seem to pop up day after day in a variety of situations, are Environmental Social Governance, also known as ESG.
Similar to Corporate Social Responsibility (CSR), ESG factors may have been seen as an afterthought for organisations, but it’s no longer an optional extra. Thanks to the rise in social media and increased focus on environmental and social issues, there is an increased interest in ESG. And it’s not just about getting one element right. In other words, ESG isn’t just about whether a company avoids polluting the air; it’s also about how that company treats its workers, whether it respects human rights, and if its board of directors are diverse.
It is also becoming increasingly important for businesses to demonstrate their commitment to ESG principles. Indeed many investors are now looking to invest in companies that have a strong ESG record, as this is seen as a predictor of future success. ESG investments have been shown to outperform traditional investments over time, making them an increasingly popular choice for investors. But it’s not just investors which have sustainability and ethical practices on their agenda; this is of interest to a wide range of relevant audiences, from employees and potential recruits to customers, potential customers, partners and political stakeholders.
So, what does ESG mean for your organisation? This is not just for big businesses, any organisation can take steps to implement these principles. Reporting on ESG performance is becoming increasingly important, with investors, customers and employees wanting to see what companies are doing to address social and environmental issues. This can be used to create value for your organisation, by improving employee morale, attracting new customers and employees, and reducing costs. Taking steps to improve your ESG rating is not only good for the environment and society, but it can also improve your bottom line. ESG-focused businesses often see increased employee engagement and customer loyalty, as well as lower operating costs.
Many of us have reflected in lockdown and are more focused on our purpose at work and in life. That’s certainly the case with Perceptive, where we have chosen to focus specifically on supporting clients which are improving lives and transforming futures in science, technology and the built environment. Our own ESG journey is still a work in progress, but we are fortunate that many of our clients were already focused on sustainability, positive social impact and doing business ethically before ESG became a familiar term.
One of the benefits of Perceptive’s flat structure is that we can be agile and implement ideas quickly, including those relating to ESG. Some were cynical about our pioneering approach to hybrid working when we started 16 years ago, but this has resulted in huge carbon emission savings and a much better quality of life for our team. We have also been focussed on providing pro-bono communication support for charities like Action for Children and The Simon Community Scotland. Another hugely important driver for Perceptive is supporting and encouraging more diversity and inclusion, especially in male dominated sectors like construction and technology.
If you're looking to get started with ESG, there are a few key things you should keep in mind. First, focus on the areas that are most important to your organisation and your stakeholders. Second, set ambitious goals and create a plan for how you will achieve them. And finally, remember that ESG is an ongoing journey - there is always room for improvement!
Julie Moulsdale is the Managing Director of Perceptive Communicators, Glasgow
