Businesses play an important role in Environmental, Social, and Governance (ESG) practices and values, essential for long-term sustainability and success. ESG practices have become increasingly important for companies of various sizes and industries in order to reform the way companies operate.

Where ESG originates

The term ESG was coined in the early 2000s by the United Nations Environment Programme (UNEP) finance initiative whose core fundamental value is safeguarding the ecosystem. The UNEP emphasis on the importance of a business's involvement in non-financial factors has arguably existed for much longer.

ESG is built on three pillars, with sustainable investing being the core component. This involves responsible business practices that prioritise positive impact, a concept that has gained significant widespread traction in recent years. Impact investing has taken centre stage, this is a practice of making investments that generate other returns beyond finances such as positive social and environmental impact.

ESG explained

• Environmentally, organisations can make a significant impact by reducing greenhouse gas emissions by conserving resources and protecting biodiversity in their everyday work functions. This is achieved through sustainable practices, renewable energy investments such as solar power and resource management such as going paperless.
• Socially, organisations are encouraged to practice fair labour, equity, and inclusion. This involves creating a positive working environment to achieve this goal.
• Effective governance is also critical in every organisation, this involves transparency, accountability, ethics and compliance.

5 ways to implement ESG in your business

• Embed ESG practices in company strategy and culture.
• Develop sustainable supply chain management.
• Integrate ESG values with existing policies.
• Educate your workforce on how to implement ESG goals in their everyday work.
• Foster community engagement, enhance humane labour practices and focus on social investment.

Integrating ESG principles assists business organisations in managing risks, complying with regulations and enhancing their corporate reputation. Moreover, ESG commitments attract and retain top talent, drive innovation and contribute to a sustainable future. Companies that embrace ESG values are better positioned for success and growth.