Implementing ESG practices raises your profits by as much as 60%. Are you improving your current ESG strategies to maximize profit? If not, it’s time to get started.
How Does ESG Impact Your Business?
ESG (Environmental, Social, and Governance) issues have become central to the financial performances and investments of businesses.
ESG is critical for all organizations regardless of size and industry, with over 85% of employees preferring to work for companies that value ESG issues.
Stakeholders and customers want to invest in ethical companies. Over 75% of consumers say they won’t buy from businesses that mistreat the environment, employees, or their community, and 91% of business owners believe they should act on ESG issues.
If your company isn’t prioritizing ESG, you lose:
- Qualified employees
- Business leaders
- Customer trust
There are several other impacts ESG has on companies, including:
Increased Competitive Advantage
Companies that prioritize ESG values have the upper hand over their competitors.
Since ESG is a relatively new value among investors and consumers, implementing it now gives you a competitive advantage over those who aren’t focusing on it yet. Nearly 92% of customers agree that companies with ESG policies will outlast competitors in the long run.
Consumers are drawn to companies that want to make a positive impact. Of course, you want to prioritize other aspects of your business, but when you fail to see the value in ESG, you risk losing customers to companies that do.
Attracting and Retaining Millennials and Gen Z Employees
By 2029, millennials and Gen Z will make up nearly 72% of the world’s workforce, so it’s important to target their values.
Gen Z and millennials play a significant role in sustainability, with millennials contributing $51.1 billion to sustainable funds in 2020. Enhancing your ESG efforts is vital if you want to attract and retain these groups as they enter the workforce.
Studies show that 88% of consumers are more loyal to companies that support social and environmental issues. When you care about what your customers care about, they’re more likely to continue buying from or working with you.
A large part of ESG is employee benefits. Consumers value how you treat your employees and the benefits you offer them. They’ll look at things like:
- Paid time off policies
- Sick days
- Medical insurance
- Retirement benefits
- Overtime pay
If a customer wouldn’t work for you, they likely won’t work with you. Enhancing your employee benefits increases your ESG value, which improves your reputation and success rate.
Increased Employee Satisfaction
Employees want to work for companies that positively affect their communities.
Organizations with high employee satisfaction rates have ESG scores that are 14% higher than the global average. When employees are satisfied, they’re more likely to recommend their place of work to others and speak positively about their experience, attracting new customers and employees alike.
Attract More Investors
In 2020, investors contributed $51 billion to ESG funds, which was double the amount contributed in 2019.
As the importance of ESG increases among investors, it’s crucial to your success and funding to implement socially responsible policies. In the last five years, investors have focused on:
- Responsible investing: Investments that specifically acknowledge the environmental, social, and governance factors and the long-term health of a particular market.
- Socially responsible investing: Investing in organizations that promote ethical themes, like social justice, corporate ethics, safe environmental practices, and equality.
Keep these two trends in mind when ramping up your ESG efforts. To attract more investors, consider implementing:
- Recycling programs
- Laundering programs
- Waste reduction efforts
How Can I Implement ESG Practices?
Enhancing your ESG practices doesn’t have to be complicated. There are simple things you can do to increase your ESG value, employee retention, and customer satisfaction, including:
Minimal Liquid Discharge Programs
Companies that produce liquid waste don’t always know how to dispose of it without harming the environment. When you throw away materials you’ve used to clean up liquid waste, those materials sometimes land in the ocean or landfills.
Minimal liquid discharge programs wash your cleaning materials and professionally extract liquid waste, so you can continuously reuse those materials. This helps the environment and saves your company money on new supplies.
Want to implement a minimal liquid discharge program?
Where Can I Get Started?
Closed Loop Recycling can help you implement ESG practices like:
Consumers appreciate environmentally-conscious organizations; it shows that you genuinely care about helping the world around you. Our goal at CLR is to minimize waste while lowering your costs, so you save money and help the environment.
Contact us today to learn about our sustainable services and how they can optimize your ESG practices.