Environmental, Social & Governance (ESG)
You’re probably here because you keep hearing about ESG (Environmental, Social & Governance) but aren’t quite sure what it is and how it might affect your business. In a nutshell, ESG is a way of measuring a business’ sustainability and social impact. Specifically related to potential investments. Keep reading to learn about the key factors of ESG and how it can play into the future of your business.
Investors are factoring in environmental issues into the opportunities they choose to invest in more and more in recent years. Stakeholders want to know if companies are evaluating environmental risks and how they may affect the company in years to come. Environmental ESG factors include energy usage, pollution, biodiversity, waste management, water management, sustainability, compliance with environmental regulations, and toxic emissions.
This component factors in the company’s relationship with their community. Additionally, if the suppliers they work with adhere to the same standards and values that they do. Social ESG factors include diversity, human rights, labor standards, workplace health and safety, consumer protection and animal welfare.
Taking into consideration the rights and responsibilities of the management of a business is also very important; essentially good and ethical business practices. Corporate Governance ESG factors include employee relations, executive compensations, management structure, employee compensation, transparent accounting, stakeholders opportunity to vote on issues, business ethics, anti-competitive practices, and corruption.
How it All Ties Together
All of these elements, environmental, social and corporate governance, are all connected to the concept of responsible investment practices. The market for investments in ethical and sustainable funds began as a small investment pool that has grown substantially even just over the last year. It has actually doubled in size in the US from $20 billion to $50 billion.1 While at one point in time, ESG was a PR tactic, it is more important than ever. Your business’ ESG score is now a critical component of your business’ long term success. 2 It has become an expectation for companies to factor in environmental, social and corporate governance into their business plans to mitigate risk and identify opportunities.
How BOX Can Help Improve Your Business’ ESG Score
You may have noticed that there is a recurring theme with ESG, sustainability. It is more important than ever to consider your business’ impact on the environment. But, going green doesn’t have to be daunting or expensive, you may still be able to save money while also choosing renewable energy options. Many renewable energy plans offered are highly competitive with non-renewable options in the energy marketplace. By working with an experiencing BOX energy broker, you can choose the solution that gets you the best deal while also improving your ESG score.
Broker Online Exchange has a powerful network of over 90 suppliers throughout all deregulated markets. Our Brokers have instant access to over a million price points, as well as the ability to custom price any load size or shape. Our complimentary rate analysis service enables your BOX Broker to assess your energy spend. Your BOX Broker can procure the supplier, product, and rate that best fits your needs, while also saving you money and improving your ESG score..
Get connected with an experienced BOX Energy Broker today to take control of your business’ energy costs while improving your environmental social and governance score.
- Hale, Jon. “A Broken Record: Flows for U.S. Sustainable Funds Again Reach New Heights.” Morningstar, January 28, 2021, https://www.morningstar.com/articles/1019195/a-broken-record-flows-for-us-sustainable-funds-again-reach-new-heights. Accessed on June 16, 2021.
- “ESG Evaluation.” S&P global Ratings, N.d., https://www.spglobal.com/ratings/en/products-benefits/products/esg-evaluation. Accessed on June 16, 2021.