That’s just what marketing needed – another acronym. Whilst you may have not have heard of ESG yet, you will, and it will become increasingly important in the next decade.

ESG stands for the Environmental, Social, and Governance aspects of how a business is run. Investors (particularly sophisticated investors) are increasingly focusing on these factors as part of their analysis process. They help to identify material risks and growth opportunities. For many larger organisations, ESG is part of the reporting requirements to boards and institutions, such as the Australian Stock Exchange.

As the world changes, it is becoming increasingly important to understand how businesses and corporations’ impact on our natural environment and on our humanity. For example, some fruits, cocoa beans and Brazil nuts are at risk due to pollinator extinction, whilst barley is at risk due to water scarcity. Thus, a business’ use of water can be a key element of its ESG policy to contribute to the environment.

Why is ESG important?

For smaller organisations, ESG is very important. When you are bidding for contracts from larger organisations, they will undoubtedly factor ESG into their contracting decisions, when all else is constant. For example, if you put one company against another and they are the same price, the company that has an ESG focus will likely win the contract.

Strong ESG can also help you reduce costs by getting rid of inefficiencies. Additionally, it will provide a stronger valuation for your organisation. The by-product of many of these efforts will also improve staff happiness and productivity. ESG provides holistic opportunities for your business.

Environmental

Social

Governance

• Climate change and carbon emissions
• Air and water pollution
• Biodiversity
• Deforestation
• Energy efficiency
• Waste management
• Water scarcity
  • Access of First Nations people to maintain and protect their lands
  • Working towards to a “circular economy”

• Customer satisfaction
• Data protection and privacy

• • Engagement with First Nations people
  • Gender and diversity
  • Employee engagement
  • Community relations
  • Human rights
  • Labor standards

• Board composition
• Audit committee structure
• Bribery and corruption
• Executive compensation
• Lobbying
• Political contributions
  • Business ethics
  • Tax transparency
  • Diversity
  • Risk mitigation

How do I create an ESG strategy?

Many consultants will charge a small fortune to generate an ESG strategy. However, our team at Perth Branding & Marketing can help you strategise, plan and present information about how you are working towards ESG transformations. We can help you connect with businesses through your work in the environment, society and in regard to governance. We can create an analysis of your key clients to identify their requirements and how you can shift your business to align with their values. Our team of strategists and designers can help you create, communicate and describe your new ESG policy.

Are you ready to develop your ESG strategy?