All about ESG – what it is, who it affects and how it affects company management

By BluExperience | May 12, 2024 | ESG

All about ESG – what it is, who it affects and how it affects company management

In the 21st century, companies face many challenges. In the context of global trends and society’s growing environmental awareness, ESG is becoming a key element of business strategy. In today’s article, we will take a closer look at what ESG is, why it is important and how it affects company management.

What is ESG? Definition of

ESG is an acronym for Environment, Social responsibility and Governance. The term stands for the three main areas that companies, organizations and investors should pay attention to in order to act in accordance with the principles of sustainable development and conduct business in a responsible manner, respecting the broader interests of individual stakeholders. The ESG concept is not entirely new. It is an extension of CRS, or Corporate Social Responsibility, activities.

Is it worth implementing an ESG strategy in a company?

More and more companies are recognizing the potential benefits of ESG reporting. This is not only a necessity for change at the legal level, but also a key to sustainable growth that enables survival in a competitive market. Adapting to the new rules requires investors to broaden their view of the business, taking into account not only traditional financial indicators, but also a range of parameters that are evaluated in terms of environmental and social impact.

ESG policies focus on monitoring impacts on nature, promoting ethical business practices and ensuring effective climate risk management. By paying close attention to the environment, corporate governance and social responsibility, companies are responding to today’s challenges by providing quality products and services with sustainability in mind. By implementing ESG principles, companies can better understand the needs of their customers, leading to better relationships.

 

Sustainability and ESG – what is it and what does it mean in practice?

 

When trying to explain what ESG is, it is best to use examples. Companies that want to be perceived as socially responsible and caring for nature should develop a formal ESG policy, establish appropriate procedures, and then consistently implement them. A strategy aimed at meeting the demands of sustainable development can include, for example, the following areas:

  • greenhouse gas emissions,
  • carbon footprint,
  • Energy consumption – especially from non-renewable sources,
  • hazardous waste,
  • Water management – emissions to water.

The second element of ESG strategy is social issues. Companies that want to invest in sustainable practices should bet on:

  • supporting diversity,
  • Equalizing opportunities for women and men,
  • Striving for a work-life balance,
  • Compliance with labor rights,
  • Implementing solutions to ensure the security of employees’ personal data.

Last, the third pillar of ESG is corporate governance. Within this area, a company should focus on issues such as:

  • fiscal transparency,
  • Activities to prevent corruption, bribery and all forms of extortion,
  • board structure,
  • Management and key employee compensation,
  • Respect for shareholders’ rights.

 

ESG policy – how does it affect company management and performance?

 

A comprehensive sustainability strategy is now having an increasing impact on a company’s image. Companies that strive to make their decisions taking into account environmental and social impacts build a positive image in the eyes of their employees and gain the trust of their stakeholders. Consequently, this translates into increased labor efficiency and improved performance. In summary, companies that engage in these areas and effectively implement ESG initiatives can gain a competitive advantage in the future.

And we will help with that. After all, the workshops and conferences we organize are a great opportunity to inform your stakeholders about your CSR/ESG activities. Be it your employees, business partners, customers or the media. Use this opportunity to build the image of a socially responsible business. Recall that our events are also organized with sustainability in mind, which makes your message even more authentic.