5 Simple Ways A Small Business Can Be ESG-Friendly
In the last few decades, sustainability has been growing in importance amongst consumers and investors. Public environmental concerns are increasing, and this year’s watershed global weather events have only compounded the sentiment. Social and governance concerns have also increased, as stated by a recent ESG global study.
ESG is becoming mainstream.
Indeed, an increase in environmental concern has also led to an increased awareness of greenwashing. Customers want to rely on businesses that are both openly sustainability-led and are genuine about it, and this includes demonstrable attention paid to employee wellbeing.
However, looking the part and actually acting on it can be challenging, especially for smaller companies unfamiliar with ESG. So, here are some suggestions to overcome the hurdles and become more ESG-friendly.
1. Ask ESG Questions
Opening the door to ESG changes entails both a degree of introspection and greater transparency. If you are unprepared, a misstep in this ‘new territory’ could leave you open to competition, as well as distancing your customer base. You need a sound strategy, based on reality. Some key questions to ask are:
Could ESG changes undermine the competitiveness of the company?
How should the business address societal concerns like racial and gender equity?
How can any ESG strategy be future-proofed for tomorrow’s economic realities?
The point is to evaluate how much change you can realistically accommodate in a given timeframe, not simply reaching for unattainable goals. Your competition may operate in a territory with lower regulation, so an overly increased focus on ESG may impede you from competing effectively with them.
2. Measure Your Impact And Report All Progress
Savvy customers will know if you are genuine or not, and to have no ESG practices at all is better than breaking consumer trust through greenwashing your efforts or, even worse, failing to honestly communicate challenges and obstacles.
One way to make everything transparent is to step back from the issue and use third-party programmes to evaluate and quantify contributions to sustainability. Through those systems, companies can identify areas of improvement and formulate plans to solve those issues. Report your progress. It’s ‘progress’, after all, so it’s better to see that the work is being done than attempting to conceal inactivity.
3. Voting With Dollars
For larger and publicly traded companies, activity is widely reported for investor consideration. For privately owned, smaller companies and nonprofits, the privilege of fiscal privacy can be a burden from an ESG perspective. If a company announces it wants to be ESG-friendly, then people will want to see concrete proof.
While your ESG policy is still under development, you can also commit 1% of profits, should your business structure permit, as a transparent vote for your future trajectory. Equally, becoming B Corp certified shows that you mean business, but with meaningful intention towards your people and planet, as well as profit.
4. Make Everything Sustainable
This includes daily operations. Sustainable alternatives are abundant these days, from toilet paper to no more disposable plastic cups ever. Environmentally friendly office supplies, coffee, snacks, light bulbs, and electronics are a start. Invest in warm-toned LED bulbs, then forget about buying new bulbs for years.
This is about the principle, not for direct customer benefit. How can an ESG-friendly company be ESG-friendly if it doesn’t employ the external principles internally? Building awareness into the company culture should seek to be inclusive and discussive, and where possible supportive of local suppliers, businesses, and initiatives.
5. Participate In A Carbon Offsetting Programme
Eliminating all carbon emissions from company operations is not the target. This is a step-by-step process, and it starts with small processes. This is also true for more complex businesses with ‘externalised’ components such as manufacturing supply or logistics. Again, stepping back from the enormity of the task can be helpful, so join a carbon offsetting programme.
Companies such as CarbonFund help make these efforts easier and more visible, so your consumers have more confidence in whom they are buying from.
It’s Getting Easier
To be ‘ESG-friendly’ simply means opening the door to potential change. With this mindset, and the understanding that no matter what size of company you are, you can find opportunities to start analysing your operations, asking your people, and taking small steps that may lead to greater leaps. There are plenty of tools to access that can help develop the process. Perhaps the most important thing to bear in mind is that all businesses need to start orienting themselves towards some element of ESG, to start thinking effectively about the direction the global economy is heading in relation to the challenge of the Climate Crisis.
This is the greatest opportunity of our time. You can start by being ESG-friendly.