The last couple of years have made it clear for businesses and industry professionals that a clear and thorough Environmental, Social and Governance (ESG) plan is key moving forward. But it’s not enough to organize a thorough ESG plan. Companies will have to implement their ESG strategy into their entire corporate and financial set up in order to indicate their sustained commitment.
A host of factors have propelled this necessity of a robust ESG strategy in recent years as well. The pandemic, the subsequent economic impact and social unrest have led many companies to promote their ESG plans and prioritize transparency within their business plans and operations.
Per data, companies that incorporate these kinds of strategies into their approach and develop their reputation and public perception have seen marked growth. This kind of reputation can improve customers’ willingness to purchase a company’s products by 37 percent, and results indicate that men are affected twice as much as women by these strategies when it comes to economic behaviors.
With this trend in mind, below are three key strategies to implement into ESG policies in 2022, as it quickly becomes a necessity for businesses in any industry.
Understand Your Customer and Client Base
Due to social media and up-to-the-second news updates, companies and business leaders are expected to present publicly and transparently their ESG policies. Companies more than ever must adhere to environmental concerns—i.e. carbon footprint, emissions, renewable energy—while also focusing on social responsibility through community outreach and volunteering, and company governance through the ability to effectively and efficiently meet the goals of customers, clients and investors alike.
Per data, 45 percent of customers say it’s very important for businesses to have green and sustainable practices, and the immense increase in social media-use among individuals and companies has prioritized transparency and increased communications to the forefront of ESG practices.
By understanding your client, customer and investment base, companies can better present and optimize their ESG plans and demonstrate dedication to these issues, and in turn further grow business and activity in 2022.
Integration of Programs and Content
Though creating a thorough and robust ESG plan that is visible to the public is a great start, whether that be on a company webpage or through a press release, businesses should also make sure to integrate actual implementation into their plan.
Establishment of a comprehensive, company-wide ESG plan, which engages investors to help ensure buy-in is vital as a first step. Next, companies should create a schedule and outline expectations for activities, volunteer opportunities and other programs so that employees remain informed about how they are able to participate as well. Finally, proper branding and content following these kinds of outreach programs is crucial, as it can help foster a sense of community responsibility and presence with the public.
Showcase ESG Strategy
Finally, it is important to properly and effectively showcase your company’s ESG strategy to investors. In essence, this means that companies should outline how their ESG policies have positively affected business, whether that be through increased equity returns, improved public standing through green and sustainable practices, volunteering and outreach activities, and overall growth of business since implementation.
Additionally, this presentation of ESG policies should also showcase the broader positives that have come from its creation. Namely, these kinds of practices can lead to more efficient allocation of capital, and less maintenance and renovation due to new building technology and sustainable infrastructure, and in turn see more effective use of investment funds.
By incorporating these practices into your ESG strategy, companies can more easily attract new investment. Focusing on public perception, integration of programs and content, and properly showcasing and presenting a company’s ESG plan will be vital moving forward as this sector of the industry only continues to grow in 2022.