How to Make ‘ESG’ Reporting a Competitive Advantage
As the Environmental, Social, and Governance (ESG) movement continues gaining momentum in the corporate world, many companies fail to understand the breadth and depth of support for the underlying reporting expectations. Everyone from customers, employees, and regulators want to know that your company does not make a net negative impact on society.
Just because you manufacture and sell a product or deliver a service to your market and fulfill a need in the marketplace does not mean you are doing this in a way that is responsible. For example, if you are polluting the air, buying products made with child labor, or not paying your fair share of taxes, that is a problem for the rest of us. We don’t care how profitable you are.
So, ESG is about the greater good. We want and need companies to think bigger than just what’s good for their executives and investors. It’s kind of like the Golden Rule for public companies. Treat others like you want to be treated – including stakeholders beyond the immediate transaction who can be affected by your operations.
The question is, are you going to just comply with the minimum requirements of ESG and move on with your normal business operations as much as possible? Or might it be a strategic opportunity to get ahead of this highly purposed movement and help lead it by showing other companies how to report the full impact of your business on the world.
The truth can set you free – for more growth. An uncompromisingly transparent look at how your company affects others outside your normal purview will likely earn you trust. Employees, arguably more most important asset, will want to help you find solutions. Customers will see this and in their own ESG efforts want to do more business with you.
Other stakeholders from bankers, lawyers, and insurance providers will want to get in on the action – your vision, growth, and integrity – too. Soon, you’ve created a culture and brand about your company that grabs the headlines and further propels you in ways you could never have imagined. All because you decided to turn this ESG problem into an opportunity.
Look at many of the fastest growing and largest companies in the world. If you want to be more like them, you must think more like their CEOs and embrace ESG. Leaders like Bezos, Musk, and Cook did not get where they are by thinking small and doing less. For them, every person on our planet is a potential stakeholder from whom they want to earn trust.
Millions of people may want to buy your product or service in the future. Just help them see that they are working with a good, fair, and just provider. And maybe even making the world a better place.