Blog: Better Together: Why collaboration is key for ESG success
By Jeffrey Mushens, Technical Policy Director, TISA
In today’s world, changes to environmental, social and governance (ESG) reporting are happening faster than ever, with important knock-on effects for organisations, as well as how people live and invest their money.
With ESG principles being written into law across the globe, businesses and financial institutions must ensure they are playing their part in tackling significant, society-wide issues – whether it is working towards a lower-carbon economy or championing greater diversity and inclusion in the workforce.
More than just being the ‘right thing to do’, strong ESG credentials are becoming critical to businesses’ future success, and only when we work together will real change be accomplished. Here are some of the factors that organisations must be aware of to succeed.
What is ESG?
Within the broader scope of sustainability, ESG encompasses three key factors: Environment, Social and Governance. Put simply, ESG is a way to measure and compare how well a company handles the following matters related to sustainability and ethics:
- Environment – Because every company needs energy and resources to run effectively, every company affects, and is affected by, the environment. With this in mind, the ‘E’ in ESG includes the energy that companies takes in, along with the waste it discharges, the resources it needs, and the consequences for the planet as a result. More broadly, this pillar also encompasses carbon emissions and climate change.
- Social – The ‘social’ aspect of ESG encompasses diversity and inclusion, as well as the relationships and reputation your company maintains with individuals and institutions within the communities where you operate.
- Governance – Finally, ‘Governance’ refers to the internal rules and processes a company uses to manage itself, govern its decision-making, comply with laws and address external stakeholder concerns. Every company, being a legal entity, requires governance.
Why be sustainable?
Leading businesses actively prioritise engagement, education and positive outcomes not just for their own benefit but also for their industry, clientele, and the environment. ESG, in this context, is all about creating better frameworks for ethical business conduct – collaborating with different stakeholders to make better decisions that will help performance over the long-term.
Recognising the increasing desire among different stakeholders – including consumers, employees, potential investors and supply chain partners – to engage with sustainable companies is vital to securing a strong competitive advantage.
For instance, socially conscious customers will often look at a company’s treatment of its employees, community and the broader environment as a reflection of how they will be treated. Meanwhile, prospective clients will be more likely to partner with established, trustworthy firms that have a strong ESG agenda.
In this way, companies that engage with the unique perspectives of their different stakeholders and strategically communicate their ESG efforts will be better placed for success. Not only will they retain and attract the best talent, they will also demonstrate robust business planning and reliability externally to build trust.
How can TISA help you?
We’re proud to be partnered with The Disruption House (TDH) to help our members enhance their capability by increasing their understanding of ESG. This includes providing help where in-house resource is stretched, unlocking new growth opportunities, or simply identifying gaps that need to be filled.
Carol Knight, CEO of TISA UK, commented: “In today’s climate, showing genuine commitment to ESG goals is pivotal not only for business success but also the wellbeing of our planet. We’ve been actively listening to our members to understand how TISA can play a more supportive role in their ESG efforts and objectives, and our newly established partnership with The Disruption House is testament to this.
“Guiding our members through the intricate ESG landscape remains a central focus for TISA, and we look forward to helping our members deepen their engagement to foster sustainable growth.”
TISA also works with its members to regularly develop new industry good practice guides to support them with ESG matters. If you’d like to get involved or learn more about how TISA can support your organisation’s ESG efforts, please visit our website here or email us at enquiries@tisa.uk.com quoting “ESG” in the email.
Useful links
TISA’s Sustainable Business homepage: https://www.tisa.uk.com/esg/