Successful businesses understand that they have both social and environmental impacts and that operating in a socially and environmentally responsible way can enhance their growth and reputation whilst benefiting society.
TBC is passionate about helping businesses with their corporate responsibility and environmental, social and governance impacts. It’s all part of providing Business Advice in the Round.
Corporate Social Responsibility is now generally referred to as ESG meaning Environmental, Social and Governance and encompasses the three key factors in measuring the sustainability and societal impact of a business.
ESG encompasses
- Environment: for example, climate change and the prevention of pollution
- Social Benefit: including the wellbeing of employees and the community at large
- Governance: managing a company on a transparent basis with shareholder and employee involvement.
The core to ESG is the continuing commitment by a business to behave ethically and contribute to economic development while improving the quality of life of its workforce and their families as well as of the local community and society at large.
Your company should have regard to ESG factors especially when seeking access to finance as most socially responsible investors check companies out using ESG criteria to screen investments and a disregard for ESG is viewed as putting a business at reputational risk.
Although some companies are required to report on ESG matters in their accounts, in our view it is good practice for all businesses to voluntarily address ESG. Businesses want their customers to trust them and so need to be proactive, keep them regularly informed about their activities, show how they manage operations and explain the impact they have on the communities in which they operate.
ESG is not inconsistent with growth and profitability. It is a necessary part of any company and its growth. It is essential that management addresses the issue of ESG as a question of not only complying with legislation but also embedding it as part of its policies, governance, values and beliefs that find practical expression as to how a company conducts its business.
ESG is an integral part of a company taking serious steps to build its corporate reputation and create a strong base for engaging employees, shareholders and all stakeholders including its customers.
Increasingly there is the opportunity for SMEs to collaborate with Social Enterprises, for example educational sponsorship programmes or providing fresh water to enhance the life and environment of villages where that is a scarce resource.
