Reasons Why Businesses Should Be ESG Compliant
ESG in full stands for environmental, social and governance which is a criterion that is used to assess the impact made by different companies to the world. While businessmen and women of the yesteryears were only up to maximizing their business returns within the shortest period not caring of their effects to the society and environment that they are operating in, things are now changing. The need for having responsible investors in different sectors has led to the development of ESG criteria to check on the performance and also do the rating of how investors are becoming a social and environmental concern in their investments. Here is a discussion on some of the advantages of organizations being ESG mindful.
Businesses which are investing in ESG are finding it easy to get capital for their business activities. While most investors may try to shun away from implementing ESG policies citing that it is expensive, the better part of it is it lowers the costs that companies use to get capital. Companies with low cost of borrowing can easily finance their operations and lead to expanding of their business which is key ion maximizing the returns of their shareholders.
ESG compliant companies have high chances of attracting investors. Investors are looking for companies which have a good track performance not only in their business activities but also mindful of other factors such as the environment and their social impact as well. Companies that are taking care of the environment and also keen on the wellbeing of their employees and customers make their shareholders happy.
Increases employee morale and hence a boost to organization productivity. If you looking at ways of improving your organization performance, it starts by being mindful of the employee wellbeing, the wellness of your customers and that of the environment as well. Take care of the environment, your employees and the outside people and you will have a big number of your labor force happy with the organization, which means a lower employee turnover ratio and an increase in productivity.
High ESG ratings will also improve your company’s image in the public. Having a good reputation is key for every business that is looking to thrive in business, one of the best ways that a company can maintain a clean reputation is by taking care of the society and the environment. Improve your company’s brand name by being ESG compliant and increase the earnings of the investors.