You may have heard of Environmental, Social, and Governance (ESG) but not everyone is familiar with the concept. Essentially, ESG is a framework that, among other things, helps stakeholders understand how an organisation manages risks and opportunities related to these three key business areas.
In simpler terms, ESG refers to:
- Environmental: An organisation’s environmental impact and risk management practices.
- Social: The organisation’s relationships with its stakeholders.
- Governance: Examines how an organisation is led and managed.
At first glance it may seem that ESG policy requirements and the evidence needed to prove adherence creates an additional admin burden on already time poor SME leaders. However, it can be argued that many SMEs are already conducting their businesses in line with ESG requirements.
There is already an active movement within the SME community to deliberately assess their Environmental impact, and that of their suppliers, often choosing value and ethics over simple cost.
Many SMEs are already excelling in the Social aspect of ESG by treating their teams and local communities with care, offering volunteer days off, supporting community initiatives, and fostering a respectful workplace culture and so on.
The Governance element can sometimes prove to be the most burdensome in terms of data, admin and record keeping, however, adopting best practice in business is key to good governance.
It certainly helps if you have a reliable source of reference for what it is you need your ESG policies for. Do you want to bid for public sector work, be part of the NHS supply chain, or indeed remain part of the supply chain for a larger corporate which requires robust ESG policies? Maybe you’re considering ESG as a way of future proofing your own business.
Once you have a clear idea why you want ESG policies in place it will be easier to work out the details of ‘what’ and ‘how’. Whilst there is some complexity in making the right choices, when guided by an expert who can help explain what’s required and what will actually add benefit to your business it certainly feels a lot less daunting.
Need help with your ESG policies?
The West Yorkshire Good Growth Programme is here to help offer you the support you need, via its coach-led, business support programme.
Visit www.wygoodgrowth.co.uk to learn more.
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