So, what is an ESG approach to your business strategy?
In short, ESG gets to the heart of why you are in business, who you are as a company and what impact you have on those around you, especially those that a brand touches. The economic, social and governance elements of your business model need to align with society and how you engage with your internal and external stakeholders. It also simplifies any approach you take with the UN SDG’s. Companies are now aligning their business and sustainability strategies before determining how to respond to the ever evolving business environment.
As a society, we are constantly evolving . . . at first we talked about the environment and the impact we, as humans, have on it. Then we began to broaden our thinking on this subject matter to a CSR approach and that we needed to be both corporately and socially responsible. We saw this as the community, the environment, the internal team that helped drive the business and the external community that we dealt with. Ultimately, we realised that as a business our brand and our purpose have an effect on everyone we touch. The seventeen UN Sustainability Goals are the benchmark that has been laid down by the United Nations to guide us to be better and more socially and ethically responsible. The first few goals align with Maslow’s Hierarchy of Needs, that begin at a basic human level that every human is entitled to food or that we need to eradicate poverty. They also involve gender equality, responsible consumption and what we are doing to the rock we live on. The seventeen goals contain one hundred and sixty nine targets that every business, regardless of size, can affect.
At a basic level, we all start a business to address a problem that we see in society (our purpose or the reason we exist). This may be the lack of a local coffee shop in your locality or how we may address issues around generating energy in a more sustainable fashion. This in turn becomes our mission (because we are choosing to address the problem) and our vision is what we ultimately see as the best solution in our heads, not always achievable, but something we strive for on a daily basis. All of this is underpinned by our values or the DNA of who we are. Enter ESG . . . every business, regardless of size, or where they live on the value chain, has two audiences; their internal stakeholders (shareholders, management and staff) and their external stakeholders (customers, suppliers, the community at large or everyone the brand touches or influences). Simply put, how do they, as a brand, affect everyone they touch while also being mindful of trying to align with the targets laid down by the United Nations? This can range from, where raw materials are sourced to them being an equal opportunities employer. At the end of the day, people buy from people and if they don’t like what they see/hear, then they will go somewhere else.