What is ESG?

ESG (Environmental, Social, and Governance) refers to the three key factors that measure the sustainability and ethical impact of a company's operations. It encompasses a wide range of criteria, including environmental performance, social responsibility, and corporate governance practices.

Engaging with ESG is important for companies because it enables them to address environmental and social challenges, build resilience, enhance reputation, attract investors, reduce risks, and contribute to a more sustainable and equitable future. Some key areas covered under the headings of Environmental, Social, and Governance (ESG) that SMEs need to consider;

Environmental:

• Climate change and carbon emissions

• Energy and resource efficiency

• Pollution prevention and waste management

• Biodiversity and ecosystem conservation

• Water management and conservation

• Environmental compliance and reporting

• Environmental risks and opportunities

• Supply chain sustainability

Social:

• Employee health, safety, and well-being

• Diversity, inclusion, and equal opportunity

• Labor rights and fair employment practices

• Human rights and supply chain ethics

• Community engagement and impact

• Customer satisfaction and product safety

• Social impact initiatives and philanthropy

• Stakeholder engagement and dialogue

Governance:

• Board structure and independence

• Executive compensation and transparency

• Anti-corruption and bribery policies

• Risk management and internal controls

• Shareholder rights and engagement

• Ethics and integrity in business practices

• Transparency and disclosure practices

• Compliance with laws and regulations

By integrating ESG principles into their strategies and operations, companies can create long-term value while positively impacting the planet and society.