I believe #esg is really a corporate strategy, (in most of the cases, there are exceptions), let me explain.
Over the past decade, #esg has seen a strong focus. Organizations have built ESG departments, banks have built sustainable / responsible investments / banking and other similar departments, focusing on ESG initiatives.
ESG, the abbreviation represents a consolidated effort ;
E – Impact on environment, carbon footprint, organizations investment towards net zero carbon emissions.
S- Social Impact on communities around the organization.
G – Organization’s internal governance model, impact of employees, executive payout, etc.
The objective seems to portray that they “care”, they have a “soul” and their “intent” is more than to just make money. So most of these initiatives, at least around “Environment and social” parts of ESG is usually highly publicised.
The world should know, and nothing wrong it telling the world but without the marketing, the impact usually is limited. There are exceptions that I am aware of, these companies usually do ESG in stealth mode, these are rare breed though. In some countries ESG initiatives are reported to regulators as well, with a direct impact on how much scrutiny they face from regulators.
ESG can have an impact at various dimensions of the business,
* Brand
ESG strengthens the soft power of a brand which has a direct impact on the consumer behavior, and it stands true for B2C and B2B businesses.
* Top line and bottom line
ESG is proving to be a competitive differentiator, ESG related ask are prominent in proposal requests (B2B), and retail impact is obvious.
Moving to environmentally compliant ways to build products also usually reduces cost of goods. #greenfinance is a good example.
* Investments, fund raising and exit strategy
Everyone has an exit strategy, irrespective of the size of the organization. More so for #startups , due to lack of a profitable balance sheet, a good ESG report could mean the difference between an exist or slow progress towards oblivion.
ESG might be a business strategy, but I believe its consolidated impact on the world is positive. I see kids get inspired, communities get help in need, organization invest in reducing their impact on the environment.
I think it is better than the organization just being great business (which is critical for any society for jobs, security, educations), they think inclusive of the world around them.