Market gains from your ESG strategy

Sep 5, 2024 10:47:33 AM

"Some firms are talking about a “sustainability revolution”, where a corporate entity can no longer afford to sit back and ignore the ESG agenda. If they do this, they will risk losing market share to their competitors; and losing the top talent which they, in fact, need to succeed – when these individuals opt, instead, to work elsewhere."

By BossJansen Executive Search

The principles surrounding ESG encourage a firm’s C-suite and board of directors to view performance over and above the extent to which money is flowing into the company bank account. In effect, studies show that ESG can bring about marketplace gains related to everything from corporate reputation and brand value, to customer loyalty, employee retention rates and even investor confidence..

The acronym ESG, in reference to an organisation, provides a strategic framework within which a firm’s directors can assess, or address, its most pertinent risks and opportunities. According to Airswift, a global workforce solutions provider within the science, technology, engineering, and mathematics (STEM) niche, matters of ESG can serve to boost operational performance and bring about heightened financial returns for a firm.

But the principles surrounding ESG have a higher purpose: they encourage a firm’s C-suite and board of directors to view performance over and above the extent to which money is flowing into the company bank account. In effect, studies show that ESG can bring about marketplace gains related to everything from corporate reputation and brand value, to customer loyalty, employee retention rates and even investor confidence.

ESG and the hiring process

If you’re unsure of how ESG relates to the job search and the recruitment function, let’s look at it’s three key pointers – the people who work at a company (or are affected by its impact on society), the planet on which we all live, and the profits a company needs to make to remain sustainable.

So, as you set about hiring key individuals for your organisation – and hopefully acting in such a way as to keep them happy and retain them productively – you’ll realise that your top talent will demand that ESG practices are being looked at, and improved upon, throughout all your operations on an ongoing basis.

Such individuals will likely ask themselves, before signing any offer of employment (or continuing beyond the year mark), whether your company:

– Supports the health, happiness and well-being of its staff contingent and the surrounding community (the people factor); and

– Is intent upon improving its revenue streams (the profit factor) over and above its competitors, because there should be limited need to fork out for the unnecessary and hazardous occurrences that may transpire as a result of acting without the surrounding environment in mind (the planet factor).

ESG in action

The “e” of ESG stands for the environment, and companies around the world have been measuring their energy and water usage, together with their volume of carbon emissions, for some years already in an attempt to keep their carbon footprint as low as possible. Putting environmentally friendly policies and practices in place (from the materials used to manufacture products, to the way business is done) are no longer a nice-to-have, because as many as 85 percent of consumers will hesitate to purchase unsustainable products or invest in unsustainable services going forward.

The “s” of ESG refers to social matters, and those related to society at large. While this can be a pillar that’s tricky to put a value on, it’s important to remember that:

– Consumers are no longer keen on making purchases from a company that ignores the social implications of their actions; and– The simple act of setting up a forum of communication between staff and employer, or company and society, can assist people to feel heard as regards their rights, sense of inclusion, data privacy and more.

The “g” of ESG refers to governance – i.e. whether a company is run in an ethical fashion, where employees are fairly treated and feel safe, and where policies are carried out with a fitting sense of transparency. When customers trust how staff members behave internally, and what a firm is offering to market, they will buy from that company more readily, profits will be enhanced, and relationships should end up being considerably more long term in nature.

How the pieces fit together

Some firms are talking about a “sustainability revolution”, where a corporate entity can no longer afford to sit back and ignore the ESG agenda. If they do this, they will risk losing market share to their competitors; and losing the top talent which they, in fact, need to succeed – when these individuals opt, instead, to work elsewhere.

On the other hand, addressing all of the ESG-related concerns of a company’s staff and customers – by putting a forum in place to gauge their input – means that an organisation is geared up to trade in the marketplace at the highest level, with the best individuals on board, and after scoring the most generous financial input from its investors.

Let’s be clear: with global sustainability assets set to surge to $53-trillion by 2025, and this caliber of investments seeing far superior returns, in comparison to like for like non-sustainable counterparts, it has become time for every C-suite director or senior executive, worldwide, to take the matter of ESG on board holistically and in its entirety.

https://www.countable.com/blog/the-three-pillars-of-esg/
https://hbr.org/2022/04/yes-investing-in-esg-pays-off