Organisations and ESG standards: a Chance to Grow

Nowadays Sustainability is at the center of attention, even in organisations that up until not long ago were exclusively profit-driven. Now that main goal has not changed, but many others have been added to the agenda of enterprises, which are currently making a serious effort to comply with the ESG standards.

The ESG is a framework for Sustainability composed of three main areas: Environmental (E), Social (S) and Governance (G). To adhere to projects within these themes can mean implementing transparency and ethical practices in the company, making environmentally friendly choices, taking a stance on social issues, and so on. Observance of these kinds of practices has spread significantly in the past decade, as awareness of socio-economic and environmental issues circulated, educating the people and forming conscious consumers and investors.

It has not been easy, as these processes of transformation towards Sustainability can be quite expensive and are never really “completed”, in the sense that they must be fueled by an ongoing effort for better results. That’s why mostly big organisations, those who can dispose of a larger capital, have taken the lead on ESG dimensions. Yet even smaller companies can develop mindful practices and gain benefits from them by exploiting their own advantages, like their ability to create a tighter, more personal relationship with customers and investors, and thus more easily show them the genuinity of their efforts in the ESG sectors. It is also important to remember that the pursuit of goals of Sustainability does not implicate the sacrifice of profitability objectives.

A survey conducted last May by McKinsey & Company on more than 1,100 respondents showed that the main motive for companies leading on ESG dimension to address ESG topics is not, as one may expect, compliance to legislations, but rather promoting growth. The report goes on to address many other advantages organisations can gain by developing in these sectors, such as the opportunity to attract and retain new talents, Increase the motivation of workers, meet the clients and investors’ expectations, and enhance corporate reputation. Furthermore, a more sustainable conduct often means less waste of energy and materials, and can thus significantly reduce production expenses, while avoiding regulatory fines and maybe even earn state incentives.

It is now clear how companies no longer consider implementations and projects in the ESG sectors as something imposed by norms and industry regulations, but rather as a means to develop the organisation and promote growth. This epiphany has in recent years brought many organisations to invest in these fields, building a world where even big lucrative companies take responsibility for their actions, working together with the people to bring about a brighter future.

 

Sources:

https://esgnews.com/it/L%E2%80%99azienda-McKinsey-pubblica-il-rapporto-ESG-2023-che-mette-in-evidenza-le-iniziative-di-crescita-sostenibile-e-inclusiva/

https://www.esg360.it/esg-smart-data/promote-growth-aspettative-dei-clienti-e-compliance-mckinsey-analyze-the-relationship-between-business-and-esg/

https://www.techtarget.com/whatis/feature/5-ESG-benefits-for-businesses