Welcome to Simply-Docs

Taking ESG on Board

Why you Should Take ESG on Board

ESG may be relevant to a business irrespective of whether it is a public or private company, it is an unincorporated business (e.g. partnership or sole trader), or it is a public sector or voluntary/charity sector organisation. Whilst ESG is inevitably relevant to larger businesses, it is also increasingly becoming more material to start ups and smaller organisations.

On one hand, businesses should be seriously considering ESG in view of the potential positive impact on it of taking ESG on board, and, on the other hand, the potential negative impact of not doing so.

So what might be such positive and negative impacts?

Positive impact of adopting ESG might include:

• meeting shareholder activists’ expectations/requirements so that they are kept “on side” and supportive of the business;

• encouraging potential investors to invest in the business. Many major banks and investors include ESG investing criteria in their processes and products;

• improving relations with regulators/government;

• enabling the business to contract with those suppliers and customers who require their business partners to adhere to ESG standards;

• attracting and retaining employee or volunteer talent;

• better productivity;

• positively influencing customer sentiment; and

• achieving cost savings (e.g. reduced waste or energy consumption).

Negative impact of not adopting ESG might include:

• harming or failing to improve reputation or morale of staff/volunteers;

• failing to realize full potential sales turnover;

• dissuading potential investors from taking, retaining or increasing a stake in that business;

• losing of opportunities to tender for contracts due to failure to meet ESG standards required by tender conditions;

• failing to attract investment or to meet qualifying conditions for grants or other financing;

• incurring additional costs, expenses, fines or other penalties; and

• incurring additional legal liabilities.

    Simply-Docs uses cookies to ensure that you get the best experience on our website. Learn more