Grow a sustainable business

What is ESG?

Watch this video to learn about ESG and how it can help your business.

So ESG can be good for business. It impacts your customers, investors and your team, too.

Your customers

In the UK, 1 in 3 of us regularly buy eco-friendly products. So it makes sense to offer products and services that meet this growing need. Customers are also four times more likely to buy from a brand with a strong sense of purpose. What did they feel was important? Fair treatment of all employees, plus products and services that reflect the needs of people today were the top two factors.

Your investors

Sustainable organisations don’t just appeal to customers. They attract  investors too.  A recent study found 89% of global investors include ESG factors in their approach.

Your team

60% of UK workers research an employer’s eco credentials as part of their job search. Focusing on sustainable initiatives, such as working from home and cycle to work schemes shows a caring attitude towards your team members and their communities. 

Measuring environmental sustainability

To improve your sustainability, you need to take steps to reduce your carbon footprint and aim for 'net zero'.

Your carbon footprint refers to the total amount of greenhouse gases released into the atmosphere because of your activities.

Greenhouse gases are gases in the Earth's atmosphere that trap heat. They let sunlight pass through the atmosphere but prevent the heat from leaving.

Net zero is when the amount of carbon dioxide you add to the atmosphere is no more than the amount you take away through sustainable actions.

Understanding your own carbon footprint

You can use carbon measurement tools to see where you could reduce your emissions. There are free-to-use tools online that can help. These include the Carbon Footprint Calculator and the Greenhouse Gas Protocol Calculation Tools. You can track your advances and monitor your organisations progress.

Smart meters can help you check your energy use. Energy monitoring systems take this one step further, to give you more detailed information. They will show you different areas of energy use, such as power-hungry equipment.

Make your business greener

We’ve talked about how to measure environmental sustainability. So where do you start?

Pillar 1 - Reduce your own emissions

Pillar 2 – Reduce your value chain emissions

Reduce your overall emissions

Reduce your emissions by working with others who have green initiatives. Take time to check potential suppliers to check their values match yours. Green providers has a list of suppliers that have green credentials. 

Seek out local vendors and suppliers. If you work with a business that’s far away, you’ll be paying for transport costs. Nearby options can save you money and reduce your footprint. Your local Chamber of Commerce may be able to help.

Review your supply chain

A supply chain is only as strong as its weakest link. So, it’s important to look at the whole picture. Take Walmart’s ‘Project Gigaton’, for example. They aimed to reduce a gigaton of emissions from their supply chain by 2030. Between 2017 and 2021, they had already reduced over 500 million metric tons by working with suppliers. They focused on energy, waste, packaging, transport, and product design.

Work with your suppliers and vendors to reduce deliveries. Maybe you can group multiple orders together or arrange bulk deliveries? This will save everyone time and money and reduce your emissions.

Share your objectives

Make sure you are sending a clear message to your team. They should be seeking out environmentally sustainable partners.

Pillar 3 – Integrate sustainability into your strategy

The impact your business has on people

The 'S' in ESG is all about how your business treats people. So we can measure this by looking at:

How you treat your team and others

People want to feel safe and happy at work. They look for companies that show:

• Fair wages and benefits
• Safe and healthy work conditions
• Diversity and inclusion
• Absence of discrimination and harassment

So how do you measure these? Look at:

The best way to get an idea of how your team feel? Ask them! Use surveys or more informal chats to find out what they think it’s like to work for you.

How your products or services impact your customers and the wider community

As a business, you want to attract and keep customers. In return, they want products or services that are right for them.

You can measure this ‘getting it right for them’ by looking at:

• Complaints and how you resolve these
• Customer satisfaction surveys and metrics
• Links to / support of community projects

How your suppliers and other partners work

When you look at your social responsibility, it’s good to check who you’re working with. This means your suppliers, vendors and others who help your business. You have a social commitment to them – and they have one to you. So look at how they treat their own customers (including you!) and employees.

Some things you can measure are:

• Whether they source ingredients and materials locally
• Their working practices and conditions
• How transparent your supply chain process is

How Governance supports sustainability

Governance is about how you run your business. It includes:

• Following rules and legislation
• Having policies in place that reflect fair business practices
• Being transparent in how you operate

Governance and the ‘E’

Earlier, we listed steps you can take to make your business more environmentally sustainable. One of the things to do first is check that you’re compliant. You’ll find sector-specific guidance on the Government’s website.

When you look at this legislation, check your key obligations. Typical concerns include the use of water, raw materials and energy. They also include pollution, carbon emissions and waste management. You can carry out your own risk assessment to spot areas of concern. Work with your regulator to make sure you work within their rules. 

Governance and the ‘S’

During our last two chapters, we looked at the social side of ESG. We listed key areas to focus on, for your team. You can put some of these in place by setting out workplace policies. These set the scene in terms of what you expect from everyone who works for you, and what they can expect from you.

Some laws address social issues, and these will guide you. These include: 

• Minimum wage
• Health and safety at work standards
• Anti-slavery laws
• Data privacy
• Whistleblower protection 

Learn more about governance

Want to find out what laws and regulations apply to your business? Need help with getting started to write your policies supporting ESG? We have resources to help you.

Related learning links

As you start to put ESG into your business, we have a range of learning resources with tips and guidance to help.