The Advantages of Organizations Being ESG Mindful
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. Discussed below are some of the reasons why businesses should be ESG compliant.
ESG awareness makes it easier for organizations to access different sources of capital to finance their operations. 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. In this modern era that we are living, investors are looking to put their money in those organizations which care about the well-being of the environment and are also concerned about the social well-being as well. Organizations that are deemed to be taking care of their employees, the environment as well as their current and potential customers are reported to be having happier shareholders.
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. Businesses are looking at having a good brand name in the market, taking care of both the internal and external customers and being mindful of the environment is one approach that business is suing to retain a good business name. Improve your company’s brand name by being ESG compliant and increase the earnings of the investors.