Everything you need to know about ESG

ESG strategy is basically an environmental, social, and governance tactic that has become critical in business over the last couple of years. Organizations hold significant authority in making a difference beyond profit, which has assisted the evolution of the concept of ESG.

By covering environmental qualities, positive social impacts, and ethical internal management, ESG can assist organizations in making sure that they are doing well.

While the ESG strategy framework is doing wonders for businesses, not everyone is aware of this. If you are one of them, you are in the right place. In this blog, we will take a look at everything you need to know about the ESG strategy framework.

What is ESG?

ESG is a collective term for a business’s impact on society and the environment, as well as how transparent and robust the governance is in terms of company leadership, executive pay, internal controls, audits, and shareholders’ rights.

It measures how the business integrates social, environmental, and governance practices into operations, as well as business model, sustainability and impact.

The three pillars

ESG concentrates on various issues concerning environmental, social, and governance practices. An ESG program documents an organization’s impact on the environment and on various stakeholders, as well as its approach to governance; it also checks out probable business risks and chances in every three areas:

• Environmental

Instances of environmental factors concern energy consumption, water usage, greenhouse gas emissions, overall carbon footprint, waste management, water and air pollution and adaptation to climate change.

• Social

ESG’s social factor concerns the organization’s treatment of employees, supply chain workers, customers, commodity members, and other groups of people. Instances include fair play and living wages, DEI programs, workplace safety, diversity, fair treatment of the customers, responsible sourcing, oversight of the supply chain partners, and charitable donations.

• Governance

It concerns the internal management policies, practices, and controls that govern how an organization provides. Instances include the making of senior management and the board of directors, executive compensation, economic transparency, regulatory compliance, risk assessment, data privacy policies, ethical business practices, and regulations on corruption, bribery, conflicts of interest and political lobbying.

Benefits of ESG strategies for businesses

Following are some of the advantages of ESG tactics and impact assessment studies:

• On average, 88% of customers are more loyal to brands which support social and environmental initiatives. Prioritizing the ESG aims strengthens customer loyalty and enhances the reputation of the organization in the global market.
• In addition to this, it also assists businesses with more access to funding.

Wrapping Up

When there is a conversation about continuous growth, adaptation is the highest asset of every company. One thing that businesses today need to consider is the ESG strategy framework.

Source page- https://360csradvisory.wordpress.com/2024/07/25/everything-you-need-to-know-about-esg/