The world is changing. Technology has given us global connectivity, where major corporations are operating in every corner of the earth. Along with this, companies have also been given a new responsibility, and that is to be environmentally sustainable and socially responsible - because their actions can affect people's lives on a global scale. Investors are more interested in ESG factors now than ever before as they begin to understand that these days it isn't just about making money anymore; it's about doing well by doing good too.
What is ESG?
ESG is a term you might hear bandied about in the business world, but what does it actually mean? ESG stands for Environmental, Social, and Governance. These are three key areas that businesses can focus on to increase their sustainability across all aspects of the company. It's important to not only look at how your business impacts these areas within your own four walls but also how you're impacting them outside of it too.
What are ESG factors and why do they matter so much now
ESG factors are a set of issues that might not be as obvious to business owners as they should. These factors can have an impact on the profitability of your company, so it's important to know what they are and how they affect your bottom line.
They are also known as the "triple bottom line" or the "three pillars". Environmental factors encompass the natural world - its water, air, soil and living organisms. Social factors relate to human society - including rights, freedoms and economic structures that create a fair distribution of wealth. Governance factors deal with how ethically businesses are governed internally - through transparent decision making processes that include stakeholders from all areas of society. ESG is all about taking care of our planet for future generations by being mindful in what we do today. It's an important factor to consider when creating sustainable business practices because it can be challenging at times to balance these three aspects while keeping up with the demands of keeping your company profitable and in business.
How investors can use ESG factors to their advantage
Investors are becoming increasingly aware of the ESG movement, and it's time to take a closer look at what they're doing. The best way that investors are using ESG is by gravitating more towards investing in companies that have done well on their sustainability scorecards. This will lead them into the future with more sustainable investments and less risk than before.
Environment and Sustainability has become such a high priority, that it is seen on the same level of importance as Governance to establish the overall health of a business. Investors are not just concerned about profits any more. They use ESG factors to their advantage by considering how the decision will affect the value of their portfolio over time. By doing this, investors can make money while also investing in companies that support good causes and treat people fairly. They can feel much better about their money going into a company's coffers instead of just looking at its bottom line or quarterly earnings report alone. ESG metrics are becoming more popular as time goes on, so it would behoove all investors to take advantage of them now before everyone else does!
At SmartMatta, we also take this seriously too, and want to make sure that our clients derive maximum benefit when we are evaluated during a procurement process.
Did you know that your waste management strategy, and proof of reducing waste to landfill add significant value to your ESG scorecard?
We understand this very well and we can help you with the following:
- Help develop your Waste Management strategy
- Consistently keep reducing your waste that goes to landfill (or profit model rewards us for achieving this)
- Help you achieve Zero Waste to landfill if this is your ultimate goal (we have many clients that have achieved Zero waste)
- Present you with auditable traceable data in almost real time.
If you want to hear more, click below and our snappy consultants will make contact with you very soon.
