Environmental, Social, and Governance services for SMEs
Small businesses are increasingly recognising the importance of Environmental, Social, and Governance (ESG) factors in their long-term strategy for success and sustainability.
Should SMEs care about Environmental, Social, and Governance
The significance of environmental, social, and governance (ESG) for small and medium businesses, cannot be overstated, and it’s an area that we’ve seen more and more of our clients start paying attention to in recent years.
But why is ESG important, and why should you care? Well, ESG represents more than just ethical practices; it directly influences company performance, and often company culture too. Businesses that actively engage in ESG practices often outperform their counterparts who don’t.
This is especially relevant in rapidly evolving and highly visible sectors like technology and digital marketing.
Benefits of boosting your ESG credentials
Let’s start with your business's external perception. Showcasing your business’s strong ESG credentials can attract better hires, stronger investors, and more customers. In the realms of tech, digital, and marketing, a robust ESG strategy enhances a company's image and reputation in many different communities and spaces.
Investors and financial institutions are also increasingly scrutinising ESG commitments. Demonstrating a strong commitment to environmental targets and diversity, inclusion, and equity policies isn’t just about social responsibility—it can also lead to preferential treatment from banks and potentially lower funding costs.
Moreover, the ripple effect of ESG compliance extends beyond large corporations; these entities now expect their suppliers and advisors, many of which are SMEs, to showcase their ESG credentials. This creates a network of value-led businesses with transparent sustainability practices.
The ESG sector thrives on innovation, and a commitment to ESG can drive new, forward-thinking working practices, contributing to the development of a future-oriented economy. This reflects well on your business, and also pushes your team to be more innovative.
Beyond business benefits, there's a more profound impact too. Prioritising ESG is a step towards a healthier environment, which benefits not just the current generation but also the future ones - our children and grandchildren.
Understanding the value of ESG better
E = Environment
E = Environment
E = Environment
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:
- Reducing energy consumption - aiming for Net Zero
- Using renewable energy sources
- If you are a manufacturer look to develop more environmentally-friendly products
- Aim for paperless work processes
- Adopt a transparent supply chain with the same environmental values as you
- Reduce waste and recycle more - buy what you need
S = Social
E = Environment
E = Environment
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:
- Ethical investments
- Health and safety considerations
- Human rights and modern slavery
- Tranparent ethical supply chain
- Effective DEI strategies
- Employee wellbeing and workplace culture
- Charity contributions
G = Governance
E = Environment
G = Governance
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.
For example
- Accurate reporting to shareholders
- Doing business in an ethical manner
- Documenting your commitments
- Monitoring your environment impact
- Address at the highest level any diversity issues you may have
Contact Us
Farringford Legal
Farringford House, 24 Kent Road, East Molesey
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Ask me questions and I will answer you in real time using my knowledge of the challenges facing small business owners. For example "What is ESG?" or "What is an EOT?".
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