The purpose of an ESG strategy is to ensure that a business operates in a responsible and sustainable manner. It consists of strategic planning that aligns with ESG standards, and shows whether a business takes the environment, social impact, and governance seriously.
Adopting an ESG Strategy into your business has its benefits, no matter what size your business is. An ESG strategy provides an opportunity to assess your position in the market compared to your competitors and, as a result, develop a tailored plan that ties in well with your overall business strategy. In the long term, adopting an ESG strategy can be beneficial as the business will be innovating whilst minimising risk, however, SMEs must adopt an ESG strategy early on so that risk can be minimised, and claims of ‘greenwashing’ can be avoided.
As a result, an ESG strategy is essential for businesses as it helps identify areas for improvement and provides ways in which to address and solve these issues, as well as help you from making mistakes such as causing employee dissatisfaction. As ESG priorities can evolve overtime, they should be regularly reviewed. This can result in a competitor advantage as consumers will see an up-to-date ESG strategy and be favourable towards how a business operates.
