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WHY ESG IS KEY TO BUSINESS GROWTH
Philip Richards, Head of ESG at Sustainable Energy First, explains why environmental, social and governance (ESG) standards are powerful drivers of growth.
Investors demand insights on how companies are affecting the environment and how environmental issues could potentially affect their investment. Regulations are sharpening-up to meet these demands, Task Force on ClimateRelated Disclosures (TCFD), now mandatory for large UK businesses will require the measurement and reporting of climaterelated impacts, including, transitions to net zero.
There are risks and penalties associated with misleading or false claims, in the EU, penalties of up to 4% of global turnover could be issued for “greenwashing.”. Good quality and assurance of ESG returns is key, misrepresentation could lead to significant financial and reputational damage.
ESG is no longer just a search word, it is a critical aspect of a business’s operation. With increasing concerns about climate change, social inequality, and corporate responsibility, companies are recognising the need to prioritise ESG in their decision-making process.
Consumers, socially conscious and seeking brands that share values. Certain businesses/ establishments stipulate suppliers align with requirements to maintain service contracts. In 2023, the NHS will require contracts over £5m to have a Carbon Reduction Plan, and by 2027, all suppliers must report net zero targets publicly.
Investing in ESG has multiple benefits, including access to new markets, boosted employee productivity, and better access to finance or contract bids. Strong ESG propositions help businesses develop talent for future recruitment, building connections in local communities.
Information is in abundance and overwhelming at times. Businesses must take a strategic approach to ESG, focusing on areas that are most relevant to their operations and stakeholders, measure and report on progress to ensure that ESG efforts are delivering results.
ESG is now a vital tool for success in a future that demands navigation through constant change. Companies that invest in ESG will not only benefit financially but also build strong relationships with their stakeholders and contribute to a more sustainable future.
At Sustainable Energy First, we help organisations not just with compliance issues but with how to develop – and demonstrate – a positive impact on the world. If you would like to discuss developing an ESG approach within your business, get in touch on partnerships@sefirst.com or 01253 789816.