Let’s play a game of True or False: When it comes to a company’s Environmental, Social, and Governance (ESG) profile:
1. The whole thing is just a fad.
2. Only small, niche, and “granola-eating” businesses care about it.
3. It’s worthless because environmental sustainability has no impact on business outcomes.
If you answered “True” to any of these statements, you need to keep reading, because you’re not only missing the point, but you’re also probably missing out on lucrative opportunities.
Organizations are increasingly being evaluated by investors and consumers alike based on non-financial performance with emphasis on their environmental sustainability efforts. Research shows that environmental sustainability is a driving factor in which companies consumers choose to buy from, even more so than brand recognition. Many companies are taking this a step further than their own factories and offices, requiring everyone in their supply chain to report on environmental impact metrics as part of their own ESG value chain initiatives.
Though naysayers tout that ESG is a financial burden and disruptor to business stability, quite the opposite is true. Demonstrating a commitment to transparency about the environmental risks and opportunities a company faces has been proven to strengthen relationships with employees, customers, suppliers, and local communities. It can also strengthen your bottom line, enhance your business’s resilience, and put you top of mind—and wallet—with consumers.
Profitability
Implementing an ESG approach to operations, can make your business more efficient by decreasing the number of resources needed to maintain operations. This will lead to lower costs, increased profits, and better decision-making. Many companies are even including sustainability data in their annual reports because it has a positive impact on the bottom line, including being synonymous with high-quality management teams and improved returns.
Planning
One of the greatest challenges today’s business leaders face is the uncertainty created by rapidly changing business requirement and compliance initiatives, as well as disruptive technologies. Including ESG practices in your business, provides you with important information for long-term strategic planning as well as getting ahead of changes in regulations that might affect your business’s financial performance or reputation.
Public persona
And speaking of your reputation, evidence indicates that companies with sustainable practices are viewed more favorably and trustworthy than those that do not. When you apply ESG standards to your business, you can help maintain a positive image and build trust by ensuring you’re living up to your values and meeting your customers’ needs. This leads to higher brand value and a competitive advantage in an industry where many companies struggle to balance profit margins with ethical considerations.
ESG is slowly moving away from voluntary efforts and disclosure to regulatory ones with significant impact on how companies collect, verify, and act upon environmental sustainability initiatives. In March 2022, The Securities and Exchange Commission proposed rule changes that would “require businesses to include certain climate-related disclosures in their registration statements and periodic reports that name climate-related risks that have a material impact on their business, operations, and financial conditions.”
Unfortunately, this is easier said than done. According to 57% of Sustainability and Corporate Responsibility Officers, accurately capturing large volumes of data across ESG initiatives, correlating the captured data into business risk, and identifying opportunities for improvements is a huge struggle.
Procellis helps you harness the power of technology by automating the collection and correlation of data in relation to operational efficiency, energy consumption, and other ESG metrics. This includes connecting APIs and creating software patches to correlate data, enabling business leaders to accurately track the progress of ESG goals, and identify and mitigate risks and inefficiencies in real-time.
Together Procellis and Cisco can update your infrastructure with refresh programs that reduce IT-related CO2 emissions by up to 90%.
You Might Also Like...
6820 Shingle Creek Parkway Suite 2 | Minneapolis, MN 55430