Grow a sustainable business

ESG's impact on business

ESG can be good for business. It impacts your customers, investors and your team, too. Let's see how it does this.

The impact on 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.

The impact on 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.

The impact on your team

More than 4 in 10 of UK workers want to work for a company with a commitment to ESG. 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.

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. Working with suppliers, they reached their target six years early. 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 aims

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

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 these is to check that you’re compliant. We mentioned the Government’s website, where you'll find sector-specific guidance.

When you look at these rules, check what you need to do. 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

What you've seen so far

In this lesson, we’ve talked about some starting points.

This includes:

• What ESG is, and how it can help your business.
• Ideas for environmental and social actions you can take.
• How governance helps.