Understanding your legal obligations in today's world means also being aware of environmental, social and governance (ESG) issues. Being aware of these ESG factors when deciding on the legal implications of business decisions and long-term plans is crucial. That is where the Farringford Legal ESG services for SMEs team can help.
First of all, the Financial Times once wrote that “Environment Social Governance is an important factor in company performance and is the best indicator of environmental, social and governance success.” This means companies that pay attention to ESG can perform better than those who do not.
Also, it is important because…
Having robust paperwork in place helps demonstrate to potential clients, supplier and investors that you take your ESG responsibilities seriously. We recommend a small number of relevant documents which can be referred to when required. These provide the basis for a business to incorporate environmental and social considerations into the core of their policies and structure.
For example, using climate conscious articles shows stakeholders that a business is making a clear commitment to doing something about climate change whilst incorporating certain policies within your employee handbook can improve the social aspects within your workforce.
Other steps in the right direction include:
A Good Business Charter
For a business just beginning its sustainability journey, this charter introduces alignment with carbon metrics, targets and best practice. Designed particularly for professional firms, it articulates business standards to support clients’ own pathways. It can also include elements to evidence your social commitments too.
A Green Shareholders' Agreement
There are clauses which can be added to a shareholders’ agreement, which align shareholders’ interests with those of a business and to hold the business to account on climate change issues.
Green Supplier Agreement Terms
Clauses can be incorporated into supplier agreements, to encourage a focus on addressing climate change issues across a business supply chain collaboratively.
Environment Social Governance Focused Employment Handbook
This provides the basis for a business to incorporate its net zero ambitions into its culture through an employment handbook. It allows engagement with every employee and can be used to provide information on transition plans and the contribution each employee can make.
The 'E' commitment in ESG stands for 'environment'. It details the strategies you are engaged in to limit the effect on the environment your business has.
Examples could include:
The 'S' commitment in ESG stands for 'social' and is reflective of your company's comitment to giving back to society. A good ESG strategy ensures social considerations are embedded into the all business decisions.
Examples could include:
The 'G' commitment in ESG stands for 'governance' and is about decision making, reporting and the day to day processes of running your business.
In this situation the governance relates to the decisions you have made in relation to the 'E' and 'S' elements.
Farringford Legal Limited
Registered address: Farringford House, 24 Kent Road, East Molesey KT8 9JZ Registered in England & Wales, no 13546843
Copyright © 2021 Farringford Legal - All Rights Reserved.
VAT no 389500077
A cookie is a small file of letters and numbers that we store on your browser or the hard drive of your computer if you agree. Cookies contain information that is transferred to your computer's hard drive. More details.