ESG and sustainability in businesses

ESG strategies help businesses reduce carbon emissions, improve workplace health, and attract talent.

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With climate change phenomenon scaling with each passing day, businesses across the board have put their heads together to find a viable solution to cap the growing impact of climate change that has taken a huge toll on the business growth and marketing. This has pushed the firms, investors and the stakeholders to adhere to the concept of Environment, Social and Governance (ESG), ensuring sustainability in service delivery and production. Their prime focus has shifted to opting for ESG-compliant service providers.

Choosing ESG in service providing may have limitations, but it can play a dominant role in both helping a company set achievable goals and ensuring long-term advantages to workers, further giving an edge over taping the potential talent.

Mitigating carbon emissions is one of the core objectives of ESG, as the workers remain the drivers of carbon footprint, using company resources such as transportation and electricity. By employing ESG, employers could offer specially designed reward packages to their workers who carpool to the office, take public transportation, or opt to commute by bicycle.

Keeping this critical area in focus, businesses are now showing a growing interest in lowering their carbon emissions. To start with, the structures they occupy are the first step in these efforts. Buildings with poor design consume more natural resources, which raises demand and fuels global warming. By producing their own energy or boosting biodiversity, "green" buildings, on the other hand, can have a beneficial environmental impact in addition to reducing or eliminating negative ones.

Besides, a shift in viewpoint about workplace health and safety can drastically be improved through implementing ESG. For instance, employers have historically viewed Occupational Health and Safety (OH&S) as an expense while adhering to specific legislative requirements. This mostly happens to evade penalties and limit the employers' culpability in the event of workplace injuries. However, ESG has compelled many businesses to adopt a different strategy. Now, the employers have begun to acknowledge the value of proactive, socially conscious OH&S management.

This chronic workplace safety issue has put the spotlight on the importance of putting safety measures at workplaces as a necessary precondition for businesses to operate. Furthermore, the mental and physical health and safety of employees have long been neglected by OH&S management. Thus, in increasing productivity and efficiency, building reputation, employee retention, and in attracting skilled people, employee wellbeing has been identified to be a rather crucial factor in ensuring corporate success.

The connection of stakeholders and investors to the larger community comes next. For instance, ESG strategy of a firm can include charitable endeavours. According to Gary Gensler, the Chairman of Security and Exchange Commission of America, the office of the future will play a major role in the community. By sharing an entity's ground floors with the community by laying down an infrastructure laced with healthcare centres, libraries and other public facilities that are accessible to everyone, the office will benefit the neighborhoods even when its employees are not there. This ought to lie at the core of every business firms' ESG approach, entrenching its roots in society.

Thus, an ESG-focused strategy can have financial benefits for consumers and society as a whole. This approach to workplace management based on sustainability principles is beginning to be viewed as an opportunity rather than a cost, and businesses should arrest the opportunity by publishing accurate, unbiased and quantifiable data that genuinely and transparently informs all their stakeholders, including customers, investors and employees, of their commitments. Benefits from the standpoint of shareholders, investors and customers, as well as advantages in terms of drawing in and keeping motivated staff, can all be anticipated if the ESG-based strategies are followed effectively.