It’s 2023 and the world of EHS continues to evolve radically. Move over, siloed health and safety operations - Environmental, Social and Governance (ESG) strategy is here to shake things up and help shift our perspectives about how EHS is considered within a business.
ESG is essentially rooted in the idea that an organisation’s value lies in more than just the bottom line, and that its day-to-day operations have an effect on numerous stakeholders. In a nutshell, ESG factors pertain to everything to do with business that’s not strictly numbers-related. These factors are a variety of internal and external influences that affect both the perception and positioning of your business.
ESG assets, while intangible, are becoming increasingly important for investors, creating evidence of a significant competitive edge. It’s no longer acceptable to only consider financial metrics; investors now also consider a company’s impact on the environment, its employees, and the communities it operates in.
For investors, a strong ESG strategy that compliments the internal EHS of a company is the new gold standard. For organisational leaders, this also just makes good business sense. With ESG front and centre, organisations can tap into high-growth markets, invest in long-term assets, and develop a culture that attracts the best talent.
Research clearly shows that companies with strong ESG strategy have better financial performance, and also see a lower rate of workplace accidents. Statistics such as these highlight the clear link between health and safety, and ESG, and how combining ESG strategy with health and safety practices will streamline your organisation’s performance.
The ESG criteria began as a UN initiative, encouraging businesses to consider their impact within these areas - environment, social and governance - and focus on the wider risk of their operations. 20 years later, ESG criteria have grown into a broad series of indicators that represent more than $US 23 trillion in value.
Understanding what each pillar of ESG entails is incredibly valuable for decision-making, risk management, and maximising your stakeholder engagement. Not only will a strong strategy attract more investors, but it will also help you to reduce your impact as an organisation, and improve your systems throughout.
In this blog, we explore the complexities and nuances of each pillar, and examine why ESG strategy is an indispensable part of the future of business.