Making a case for sustainability

More and more companies say they are committed to environmental, social and governance responsibility (ESG or ‘sustainability’ as many prefer to call it) but ambitions are one thing, performance another.

Staying competitive in a challenging business environment places high demands on companies, especially in light of the impact of COVID-19. Needs for organisational change, enhanced cost efficiency, meeting changing customer and supply chain requirements, and new and stricter regulations are some of the challenges that companies have to address on a day-to-day basis. The matter of ESG policy and performance is also high on company agendas. Like any item demanding time and specific measures, ESG issues carry a cost. Is it possible, however, that this expense is offset by benefits gained? Is it feasible to attain increased competitiveness and win market advantage while investing in improved practices and performance?

Sustainability experts tell us there is no simple answer as different companies have different approaches to developing and implementing policies and practices. Also, for many companies the biggest barrier to the adoption of sustainability initiatives remains the reluctance of those controlling company finances, as they struggle to see the level of returns on offer. However, things are changing as customers are setting demands beyond price and service as corporate goals are being aligned with those of industry stakeholders and society.

Indeed, there is growing evidence that setting high ESG standards leads to more than just market benefits. An increasing number of companies insist good sustainability practices bring commercial benefits, protect corporate reputation, improve employee morale and enhance customer loyalty.

Meanwhile, there is an increasing awareness of the role of ESG as companies aim to ‘build back better’ and embrace the green recovery. In this context, it’s encouraging to see companies moving beyond greenwashing and deploying ‘sustainability’ auditing and tangible metrics to measure performance.  Recognised standards, guidelines and rating tools also offer a level playing field and a means for companies to benchmark sustainability performance with that of their peers.

Clearly, different companies and sectors are at different stages in their sustainability journey and it difficult to gauge the impact of COVID-19 on all businesses. That said, the general consensus is business as usual is not enough to meet the challenges businesses face. ESG has an important role in helping them to address these challenges, but only if companies are willing to prioritize ESG to ensure long-term survival and growth. And as we all know, ambition without performance is only fluff when it comes to sustainability.

WHAT DO YOU THINK – is the fallout from COVID-19 changing the way companies practice ESG?

It would be useful if the sustainability experts in my network here on LinkedIn could call, message or email me and share their insight and provide concrete cases describing how companies are reacting.