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  • Writer's pictureCentriq PR

No, Really, What is ESG?

Updated: Nov 9, 2023


Photo Credits: Shutterstock


By Fairul Reeza


There’s nothing new about ESG, or Environmental, Social & Governance. For some it’s a reporting concept mandated by the authorities; if we’re honest, many more see it as just another acronym that - like others before it - will be replaced in a few years.


Yet unlike less quantifiable acronyms of the past, ESG simply means quantifying and acting on the elements crucial to your company’s survival. That’s it, nothing more, nothing less. That means ESG, applied in its entirety, identifies the parts of your business - your vendors, regulatory authorities, shareholders, surrounding communities and operational processes - that are most important to its existence and by taking steps to safeguard them:

  • enable you to attract a wider scope of investors,

  • anticipate risk and changes more accurately, and

  • advise the best course in your next investment or hiring cycle

And where concepts like CSR or PPP depends on where you stand with regard to social investment or climate science, ESG offers a non-negotiable fast track to secure better terms in funding, potential tax breaks and market penetration, to name just a few.


While the big grow bigger.. will others fade away?


Perhaps the biggest recent development in large corporations has been the number of those establishing internal sustainability expertise practically overnight, both in anticipation of its advantages and the result of heightened reporting requirements usually pioneered by financial regulatory bodies. This in turn triggered a host of promotions and pay raises within major consultancies to arrest the loss of talent, and retain client confidence.


But what of the less agile or liquid companies, who are unable to pivot as quickly? If anything, the pandemic saw squeezed margins and extended terms that made it untenable for many, and the remaining (smaller) enterprises barely staying afloat. Starting something new is often set aside when you’re struggling to make ends meet.


But you don’t necessarily need to spend an inordinate amount of money to get started or to please a potential investor looking to come in. And this article is about the quick hacks that you can make as a company to at least take that first step without breaking the bank.


So if you're pressed for time or just feel that you'd like to start somewhere, here's three quick - and surprisingly high impact - things that you can do to boost your E, S and Gs.


1. DEI

If there’s one quick hack you can do to make a difference today, it’s taking action in Diversity, Inclusion and Equity (DEI) issues. More than any other measure on the “S”, initiatives within DEI are generally actionable, immediate and more importantly visible, because decisions can generally be made unilaterally or within a shorter time frame, and most can also be backdated (within reason).


Empirical data and research also continue to show how changes in DEI benefit the bottom line, and pave the way to better business outcomes. There is really no reason for any company to hesitate starting with it. And if you’re just starting out our advice would be don’t worry about the ratios, just take that first step today.


If it helps, DEI-related adjustments at the highest levels can also be smoothened by making the changes in alternate Board members first, which would allow the company to acknowledge the talent at hand, and facilitate future transitions much more naturally.

Nor should initiatives be limited to such overt changes: Grant Thornton’s report on Women In Business 2023 show how recent adjustments to working practices and flexible hours after the lockdowns have enabled more women to continue growing organically into senior positions, with Africa and Southeast Asia leading the way. The impetus to reinforce this trajectory therefore speaks for itself, as those who do would continue pulling away from those who choose otherwise.





2. Transparency

Increasing transparency with regard to remuneration can also be a game changer. Studies indicate that many a Board – particularly those still held within a founding family – have yet to standardise their disclosures in matters such as the board’s fees, allowances, benefits and emoluments as well as salaries, bonuses and other arrangements for senior management. Being able to do so (or to even start the process) can in many cases prove significant with analysts and potential investors - perhaps more so in Asia, where it would be seen as a major step in improved Governance.


3. Audit of Ready Utilities

Perhaps the easiest to appreciate and likely already in place is an increased awareness of the cost of energy, water and carbon emissions, as encompassed within Scopes 1, 2 and 3. But more than installing hand dryers in the facilities, more accurate meters with automatic shut-offs or better temperature controls, is how a quick walkabout of the premises to identify doors with noticeable gaps underneath, which can lower your energy bills by up to 20%.


Investing in the most appropriate fast industrial doors for your warehouse and storage facilities can drastically reduce energy consumption and boost the longevity of your HVAC systems, with the savings in some cases paying for itself within 24 months. And partition those open lobbies or reception areas that look into the work space: they’re the biggest outflows of heating or air-condition on any given premises.


A Commitment to Enhance Your Business Proposition


The global nature of dynamic climate events and activism, coupled with increasingly capable and open citizen audits indicate that the changes driven by ESG initiatives thus far is more likely to grow rather than diminish over time. Having established any of the relative quicker gains outlined above, the focus must then turn to building on them, and get ahead of the significant regulatory tightening we anticipate latest by 2028.


Within this heightened environment, a robustly planned and executed ESG/Sustainability Strategy, overseen by a well-informed and empowered Board and Senior Management will facilitate increased top-line visibility and growth; pre-empt regulatory and legal interventions; ease friction in procurement and sourcing events and ultimately attract and retain the best talents.


Such a systemic shift would require a clear decision at the highest levels, to create a measured, benchmarked and synchronised roadmap that can then be absorbed and embedded at every level of the corporation. Are you searching for where to start?


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