Community relationships, sustainability and corporate governance used to be voluntary for organisations and these specific aspects of a business were something that many leaders would take great pride in. However, over the past few years, investors are now targeting environmental, social and governance as part of their evaluation process in terms of identifying risks and boosting company opportunities. Companies that don’t prioritise these objectives are seen as unattractive and unfavourable in their market and are typically looked down on by customers and competitors.
In the modern business world, ESG has extended beyond an investment focus to evolve into a set of standards used to evaluate a business’s commitments to the environment and society. ESG’s main initiative is to identify, measure and quantify those efforts.
What is ESG?
ESG stands for environmental, social and governance, the three central factors in measuring the sustainability and ethical impact of an investment in a company/business. The environmental aspect refers to the environmental impact the company has, including greenhouse gases, waste, water usage, carbon usage and renewable energy. Social refers to the company’s impact on society. This could include features such as labour practises, customer service and the involvement of the local community. And finally, the governance element is all about company leadership, executive pay and ethical behaviours. ESG is consistently being used by investors to evaluate long-term goals and effects and is also now a great way for companies to improve their social and sustainable responsibilities.
The Impact of ESG in the Workplace
ESG has a direct impact on the workplace and there is a lot that businesses can do to provoke change and improve their ESG goals. Whether that’s the installation of automated lights or a whole smart office design refurbishment, these improvements can make a huge difference. The advantages of putting ESG at the forefront of a business are endless and provide a number of benefits for the company, customers, community and environment.
Here are just a few reasons to focus on ESG in the workplace.
- Employee satisfaction: It’s been reported that companies with higher ESG reports also have higher levels in terms of employee satisfaction. Employers with a high ESG are very conscious about what is around them, this also results in them being more emotionally intelligent and understanding of employee wellbeing.
- Profitability: There is a strong, positive relation between ESG and financial performance as they have not only built an enjoyable workplace for staff but also a company which customers rely on and value in terms of morals.
- Boosts company reputation: With so much media coverage and attention regarding environmental and social issues, businesses that do not demonstrate ESG could face negative publicity or customer reviews. Saying that companies must ensure their beliefs and goals are realistic and genuine and truly believe in their own claims.
- Attraction: Implementing solid ESG practises will attract more customers as value and morals will be in line. Now more than ever, customers are opting for businesses they know are principled and care for the wider community. In a recent survey, 52% of customers said they’re more likely to shop with retailers that use ethical suppliers or supply chains. Showcasing these practices will attract, retain and get positive feedback from customers.
- Recruitment: Modern-day employees and younger generations place great importance on environmental and social responsibilities, opting for companies and employment which match their own morals.
“The war for talent continues and candidates are increasingly challenging employers on their sustainability credentials. Over half of the candidates will only apply to work for businesses that have environmental and sustainability values that align with their own. Younger talents including Gen Z are particularly motivated by ethical workplaces. 67% of Gen Z state that sustainability is important when choosing a company to work for, compared to only 40% of over 55s”.
Tom Lakin, Consultancy Practice Director, Resource Solutions
ESG strategies for the workplace
Different industries and businesses will benefit from different strategies depending on their personal targets and growth. Here are just a few popular ways to implement an ESG strategy in your workplace.
Building your environment
The built environment accounts for over 40% of carbon emissions in the UK. That means that if companies are serious about improving ESG performance, optimising the physical workplace itself would be the ideal place to start. Building ESG can be improved by monitoring carbon footprints and waste, investing in durable, low-impact materials and encouraging more efficient processes.
Listening to employees and stakeholders
Listening to and understanding your employees and stakeholders will drive engagement, and workplace enjoyment and show staff consideration. This can easily be done by: recognising the hybrid working model, ensuring safety in the workplace and engaging with the local community through things such as charity work.
Improving governance and supply chain
This responsibility means ensuring everyone is doing their part, best practices are being followed and the supply chain is running smoothly and effectively. To improve your governance and supply chain you can create transparent business practices, work with companies who hold similar values and improve security.
Office design by ACI
Our office design service can help bring you and your business closer to your ESG targets by implementing sustainable design movements and creating a space you, your employees and your investors love. Office design and space planning are at the heart of everything that we do here at aci™. We know that a well-designed project is essential in providing our clients with the optimum space utilisation and therefore cost-effectiveness.
With a great office design, your staff will be a lot happier coming to work every day, making them more productive and a lot happier! With all that, brings your business more profitable! Call one of our specialists today on 0121 339 5910 and we’ll be happy to answer any questions you may have.