ESG: 8 Things You Can Do Now To Improve the ‘ESGness’ Of Your Business
Ok, so everyone’s heard about ESG (that’s environmental, social and governance, in case you missed it!). Even Boris said it matters. But it’s not just the more newsworthy environmental side that needs action. The ‘S’ and ‘G’ aspects are just as important in developing a sustainable and fair business.
Of course, when you’re absolutely up to your eyeballs with work, it can be hard to make time for this ‘extra’ stuff. After all, what’s the point?
Well, aside from the fact it’s just good manners, businesses who embrace ESG grow faster than those who don’t. At some stage, you’ll need money to sustain that trajectory, either through investment or share sale. And that’s when your ESG-ness will be put under the spotlight. In a candidate-driven market, having a sustainable edge could also tip the balance in your favour. We’re finding that businesses who show ESG compliance are able to get cheaper insurance premiums too.
Simply put, if you’re planning to go places, you need to get cracking on your ESG. We’ve put together eight simple and quick(ish) actions to help you get started…
1. Create a mission statement with a commitment
This one is a bit harder than you probably want for a first action. But – and it’s a big but – if you’ve already got a mission statement and have been trading for a while, you’ll know what areas you’re strong in. It should be quite easy to think about what you could add from an ESG perspective.
Dorian Zanker, Chief Sustainability Officer at Capsule.
Maybe you take on a lot of apprentices. Brilliant. That’s a great ‘social’ statement. You could add something around helping to develop your team, their training and future wellbeing. But it could also be something around using local suppliers, recyclable packaging, or low-energy tech… There will besomething that’s relevant to you.
Remember, a mission statement doesn’t need to be some clever strapline you plaster all over your office walls. As long as you, the directors and your team know what it relates to, that’s all you need. It’s more like a guiding principle.
And if you don’t have a mission statement to build on? Arrange a team away day and get crafting!
2. Measure and report on diversity in your business
Businesses with over 250 staff have to report on diversity in the workplace. But, really, all businesses should regularly publish their percentages. And this should also involve the number of people in managerial positions who identify as women and/or from a non-White British ethnic group.
Any business should be representative of the local, and national, community. In the UK, 16% of the working age population is from an ethnic minority (13.8% of the total population). This can vary from region to region, with London having 40% representation from a BAME background.
Likewise, this can vary within sectors. In the public sector, 2018 saw a huge variation in representation – ranging from 44% of NHS medical staff down to only 4% of firefighters. Making your own figures available shows you’re honest about the makeup of your organisation, and a diversity report can outline the success of your efforts and any future strategies.
3. Ensure Board meetings are held regularly and with supporting papers
This one surely must already be happening or, if not, is such an easy win.
Yes, getting Board papers out is a pain, but it’s well worth it. Regularity and professionalism here makes an incredibly strong statement about your governance. That gives a lot of comfort to your bank, accountants, and anyone who may want to support you financially.
If they can see a consistent record of Board meetings and minutes over the years, it speaks volumes about the management and control of your business.
4. Get a green energy tariff
This is a really simple action provided that a) you’re not in a shared building, and b) you can actually find an energy company still in business nowadays! And even if you are in a shared office space, badger your office manager to get the whole building onto a renewable tariff anyway.
These tariffs often don’t cost much more, and most major suppliers offer renewable energy packages. While what comes down your pipe or wire is not actually going to be ‘your’ renewable energy, the firm will commit to sourcing the same amount of energy you use from renewable sources into the National Grid.
Combine this with a smart meter that gives you weekly or daily usage stats, and this could be a nice tick in the ‘E’ camp. Put those stats up on a whiteboard in your staff breakout area (as well as in those Board and management papers), and you’ll prompt conversations about reducing consumption – adding a sprinkling of ‘S’ too.
Dorian Zanker, Chief Sustainability Officer at Capsule.
5. Consider where your business spends its money
The world continues to get smaller, and we can now buy almost anything from anywhere. That’s the power of an international market. But wait – all that stuff moving around has a huge environmental impact.
Remember when we mentioned using local suppliers? If you can source raw materials and office supplies from your immediate vicinity, all the better. Not only does this reduce emissions, but it also has the added bonus of supporting your community.
There’s almost always a cost impact to doing this. But if you can, then do as much as locally as possible.
6. Write an environmental policy
This might seem a bit of a biggie, but it doesn’t need to be. Start it small and easy, and look to expand over the years.
Write down some environmental targets that your business would like to achieve, e.g. move your supply to renewable energy, measure your carbon footprint, or reach 50% recycled packaging in your products. Whatever it is, write it down – and then get it in front of the other directors and have everyone sign off on it.
This will then form a benchmark to annually assess yourself against, and nudge yourself along a bit further each year.
If you’re looking for guidance on how to be more ESG-involved, then you can really do no better than using the B Impact Assessment. Achieving B-Corp certification is the best accolade for businesses when it comes to ESG. Worldwide, there are over 4,500 businesses with this highly regarded status.
Dorian Zanker, Chief Sustainability Officer at Capsule.
7. Pay over the minimum living wage and start a share scheme
You may already pay your staff more than the recommended rate (£9.50 an hour from April 2022) – but if so, shout about it.
And if you’re ready to take things a step further, consider a share scheme. What better way to really thank your team and allow them to participate in the success of your business than to offer shares in it? Not only can it boost employee engagement, but it also spreads control and allows new ideas to filter in.
By using an Enterprise Management Incentive scheme, you can do all this in a tax-efficient way too. Chat to your accountant about this.
8. Get a work compost bin
So this is the outlier. The weird one. Again, it may not be possible if you’re in a shared office space, but just think how many of your organic green tea bags could be saved from landfill with minimum effort. Stick ’em in a compost bin round the back of your office or factory unit. If you’re feeling really proud of it, then stick it out the front!
It’s amazing how much this will save on pointless transportation. And it also helps your team think a little bit more about waste generally. You never know, you might even start growing some company veg with the compost. That’s sure to spice up the monthly team lunch!
Where does Capsule come in?
We’ve always said that businesses who rise to their responsibilities deserve to be rewarded. That’s why we work with insurers who know the risk-limiting impact that sustainable values have. And that’s why they offer products and premiums that reflect it.
If you want to chat about your ESG plans and how your coverage could match your journey better, get in touch. We love meeting brands on the rise.