Environmental, Social and Governance: Practical, Not Political

From climate change to income inequality, organizations and businesses face a range of global and systemic challenges in the decades ahead. While the term has become politically divisive, companies need to create (and adhere to) stringent environmental, social and governance initiatives to navigate the substantial risks that lie ahead.  

What is ESG?

ESB is abbreviates the three pillars of the operational framework: environment, social justice and governance. The three frameworks encompass any and all non-financial risks posed to organizations every day and in the future.

ESG initiatives were born out of popular demand from investors, legislators, and the general population. At its core, ESG acknowledges that privately and publicly-owned companies, non-profits, and all capital or asset-holding organizations have a responsibility beyond the bottom line.

Many investors and consumers make financial decisions based on the existence of robust, active ESG efforts by the world’s biggest brands. These campaigns are divided into three distinct but inclusive pillars.

Environmental – With the renewed focus on climate impact, the environmental pillar includes any efforts to mitigate externalities and waste. Initiatives vary by industry, region and brand, but many at least account for environmental impacts like:

·      Carbon emissions

·      Material waste

·      Water conservation

·      Recycling

·      Renewable energy

Social – Brands have emphasized safe and equitable working conditions, fair pay, and professional development to improve internal operations. At the same time, brands must also evaluate their community impact, such as:

·      Investigating labor practices along the supply chain

·      Researching and prioritizing product quality and safety

·      Measuring and improving community impact, including housing availability and traffic issues

Governance – Finally, leadership must put itself under the microscope to ensure board diversity, fair executive compensation, and managing stakeholders’ rights.

Read more: What is a Building Management System?

ESG is Here to Stay

There is considerable (and growing) evidence that, rather than causing a drag on revenue or growth, brands that invest in ESG perform better than those that do not; there’s also evidence that ESB companies have better credit ratings and lower loan and credit default spreads.

63% of ESG companies saw positive results associated with their initiatives, compared to just 8% reporting negative results.

Value creation is enhanced in several ways, including:

·      Lower customer acquisition costs

·      Lower energy and material costs

·      Attracting high-quality talent

·      More appealing to investors

Make a Practical Investment in Your ESG Effort

Keen Technical Solutions and committed partner in developing and improving your environmental, social and governance goals. Our deep experience across markets provides us with the expertise necessary to implement energy reduction systems and report on those energy savings to corporate stakeholders. Let’s get started; contact a Keen energy efficiency consultant today.