5 Tips to Improve your ESG
In a recent webinar with Enterprise Nation, advisers and business owners learnt from those in the know when it comes to supporting SMEs (small and medium enterprise) to improve their ESG (environmental, social and governance) risks.
What is ESG?
ESG is an umbrella term for how an organisation acts in a responsible and sustainable way. It's used by stakeholders, like investors, to consider environmental, social and governance performance when making decisions on who they do business with.
Plan it with Purpose
To kick off the session, Kieran Bunting, Head of Partnerships at Enterprise Nation shared our new partnership and Plan it with Purpose campaign. The campaign goal is to support
10, 000 small businesses implement sustainable best practices that deliver a positive impact on the planet, society and the economy.
Kieran shared the online Plan it with Purpose hub, which includes the diagnostic tool, online learning and sector guides, events and connections to advisers.
- The campaign recognises that for small businesses to make change, they must first have the tools to understand current behaviour when it comes to sustainability, and to measure impact. Business owners are invited to answer a series of questions about their business and the way in which they operate.
- Answers given will deliver results and recommendations that form the basis of an immediate action plan, including a checklist of actions, content to view, and advisers with whom to have consultation calls.
Online content and case studies
- From the hub, small businesses can access a wealth of content and case studies. From topics spanning beliefs on environmental and ethical issues, to perception of cost and time on implementing positive change.
5 tips to improve the ESG in your small business
Danielle Thompson, Enterprise Nation Adviser and Founder of Sustainablee provided five key steps smaller businesses can take when approaching ESG:
- Document the positive impact you want to make
Using a positive impact statement can help to set an overall direction for your business and employees, setting a reference point both internally and externally. It must be meaningful to you and your team or it won’t be impactful. An example might be to improve diversity in your industry or help to address social mobility within your industry.
- Agree simple metrics to monitor progress
This is the how phase and sets out the roadmap to employees and customers. Doing this can also help to identify exactly what work is important internally when it comes to making small changes as a business.
Examples include energy usage per employee, and the percentage of managers from underrepresented groups. If possible, consider ratio metrics rather than absolute numbers so you can monitor progress over time. Setting short-, medium- and long-term goals can help you to make sure you stay on track.
- Improve company travel habits
Consider conducting a travel to work survey to understand where you might be able to encourage more travel by foot, bike and public transport. Based on your results, consider appropriate action.
This might include changing start and finish times, investing in car charging points or providing changing and shower facilities if possible. If you can’t provide your own facilities, you could ask a local gym or leisure centre if employees could use their facilities for a small monthly donation.
- Help advance a relevant societal issue
In the past, one-off CSR (corporate social responsibility) initiatives were the primary way a business could support communities. Today, longer-term, partnerships and helping in a more holistic way can be far more impactful.
One way you can do this is to identify a social cause your company is well placed to advance and partner with a charity or not for profit that supports that issue. Support doesn’t have to be financial. Often skills and time are valued just as highly. Avoid making assumptions about what they will need - ask them what they would benefit most from.
For example, a marketing agency could provide one day a month of copywriting time to a local homeless charity to write their newsletter and fundraising campaign material.
- Increase corporate transparency
Put simply, this is being open, transparent and honest about how your company is run. No organisation is perfect, but demonstrating you are aware of where you need to improve and how you’re going to get there is a good place to start.
Ensure you have responsible governance; a robust and well communicated code of ethics for example, and regular internal sharing of financial results. Consider having external representation on your board or leadership team to offer external oversight and diversity of thinking. If you have a top team which is currently lacking in diversity, what steps can you be taking now to address this in the future?
It’s clear that small businesses have a part to play when it comes to ESG. Addressing ESG is possible for businesses of all sizes and it can have positive impacts on the business and the wider community.
Find out more about the Plan it with Purpose campaign and resources.
You can watch and listen in to our on demand webinar recording.