Why ESG and why Now?

The term ESG is a term widely used by investors when they are evaluating which organisations, they wish to invest in. It stands for Environmental, Social and Governance. Its principals and framework is derived from the UN’s 17 Sustainable Goals (SDG). The idea behind these goals is to set a picture of … “If we are to achieve these 17 goals our planet, our people and our economies will be fundamentally changed”. If you want to know more, I wrote a blog explaining them

Initially these goals were not really being taken seriously but as we come out from COVID-19 pandemic, some powerful forces are coming together to transform our world. These forces include disruptive technologies, changing consumer attitudes and societal movements around gender and race

Let us start by defining ESG:

The “E” mainly focuses on how the organisation influences the environment and what it will do to help preserve it. Some of its aspects include a company’s climate impact, its carbon emission, its waste production, and its general environmental behaviours.

The “S” investigates the company’s relationships with other businesses and communities. For example, how it is treating its clients, its workers and how diverse is its management team and workforce.

The “G” is concerned with the internal company’s affairs, Diverse boards are a key component of good governance, because they take a broad perspective on the opportunities and risks facing the organisation and help deliver long-term value.

So Why now?

From the Social point of view: if businesses want to secure government funding and retain their licences to operate, while remaining relevant to consumers, they need to understand their purpose, as well as their dependencies on the communities in which they operate and what they are doing to attract talent.

From an Investor point of view: in 2019 $77.8BN AUM funds have rebranded themselves as Sustainable funds. 84% of global investors and Asset Owners are looking into ESG when deciding to invest. (Alpha)

From the Employee proposition point of view: Millennials and Gen Z will comprise the largest share of the workforce, representing more than 70% of the global working age population by 2030. To them ESG is key when choosing which organisation, they want to work for. (check out my Poppulo webinar on this topic)

From the customer point of view: ethical buying decisions are on the rise among all kinds of customers. Customers want to leave a legacy when it comes to their spending and the newest mindset is leaning towards where are their money going to be spent and what impact it will have on the planet.

Currently millennials and Generation Z are increasingly leading Tech and FinTech start-ups and they are mission-driven and want to change the financial services industry from within. ESG and Tech/Fintech will increasingly become the new normal and they will become accountable for their impact on the world, taking to heart what is most important for all of us: our future.

Communique specialises in communicating Environmental, Social, Governance (ESG) strategies. Our work has impacted 150K employees, 200k customers and resulted in £300M investment deals completed. If you need help gaining buy-in from your leadership team or designing your ESG communication strategy get in touch

Read Also: How to modify your company’s culture post COVID-19


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Gihan Hyde
Gihan Hyde is an award winning corporate communication expert with a deep passion for internal communication. Her roles spanned different organisations including HSBC, Barclays, M&S, and Department for International Trade, and the Riyadh Metro Project.
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  1. […] In one of our blogs, we have identified how investors, customers and employees are demanding from organisations to report on their Environmental, Social, and Governance (ESG) performance and how these organisations need to reassess their strategy to meet these new demands. In a McKinsey analysis of employee sentiment, 63 percent of employees surveyed said they want their employer to provide more opportunities for purpose in their day-to-day work. […]

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