The 77th UN General Assembly (UNGA) contained various sessions that stressed the importance of businesses as the drivers of SDGs through effective ESG (Environmental, Social, Governance) management. ESG is the guiding principle for businesses to create tangible, sustainable impacts via strategy, management, and day-to-day operations. Still, one point remains: how do we begin implementing ESG strategy?
UNDERSTAND THE BENEFITS OF ESG
Companies must understand the benefits that come with ESG investment and ESG operational integration. Today, climate extremities are only worsening due to more carbon emissions. Besides, the world is interconnected: even if only one player in the web of stakeholders becomes ineffective, the whole system bogs down. Apart from that, people’s communication has never been more accessible, and they care more than ever about the environment. With this understanding, firms will realize that bettering the environment (E), strengthening social contribution (S), and employing good governance (G) can produce tangible benefits. A better workforce and stronger stakeholders mean more productivity and economic power for businesses. Also, taking care of the world with concrete actions such as capturing carbon and using renewable fuels means the world will still be around to support the companies for far longer.
ELIMINATE GREENWASHING
Enter “greenwashing:” making “environmentally beneficial” actions superficially—often as a form of “virtue signalling” in the hope of creating quick profit. This action often exacerbates not only the brand image but also the very environment it is supposed to “help:” a major vehicle manufacturer was severely fined for falsely advertising that their vehicles emit no emissions. In another case, a prominent soap brand lost significant sales due to its “organic soap,” using even more chemicals than its standard product lines. Corporations must understand that the world doesn’t run on a single bottom line—profit—anymore; instead, it runs on three: the Triple Bottom Line (3Ps), or Profit, People, and Planet. The 3Ps and ESG go hand-in-hand; by consciously investing in environmental action and uplifting the quality of life of all in the company’s value chain inclusively, everyone grows together. Apart from that, today, various investors use ESG as one of the raters of investment attractiveness. Greenwashing is equivalent to a fraudulent claim, which risks the company losing money and public trust.
Lastly, every brand (and indeed, everyone) needs to understand that it is never alone in the quest to make the world a better place. International organizations, governments, private sectors, and even SMEs are joining more than ever in the fight. Laws are being passed on a daily basis to encourage green industry and ESG investments, while businesses are increasingly realizing the value of incorporating the Triple Bottom Line into their operations. With all these, businesses will find support at every step in driving our world toward sustainable, inclusive growth.
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