Once seen as an optional addition to a business’s operations, Environmental, Social and Governance (ESG) and sustainability are now viewed as vital to a company’s future growth. Organisations are no longer simply asking when a sustainability agenda should be integrated into planning, but rather – and more importantly – how a robust and meaningful transition can be undertaken without the business being harmed.
In recent years, investors have been clear that the ESG frameworks of their would-be prospects are central factors in determining the potential provisioning of assets. And this isn’t just an ethical matter: climate change and related crises have become a defining factor in the long-term viability of businesses, and investors want their investments to reap returns well into the future.
But aren’t there significant risks involved in evolving business practices with changing demands? Isn’t there a chance that if a company shifts from a purely economic approach to business growth to one that incorporates social and ecological considerations, its growth will be significantly affected? For many companies, realising ESG targets isn’t just about making tweaks here and there to limit energy consumption and waste generation. There are supply chains to examine, communities to contemplate and the behaviours of the consumers buying and using their products to consider. Failure to carefully integrate sustainability into business strategy could introduce risk, increase costs and even threaten the long-term viability of an organisation.