ESG or Environmental, Social, and Governance principles are a set of principles on which a company and its investors can measure the impact of its operations and long-term strategies. Today, investors are increasingly expecting the businesses they connect with to recognize and address both short-term and long-term risks and opportunities about ESG factors that can impact long-term value creation.
To create a strong ESG strategy, a business owner should contact the best ESG advisory firm in UAE, and here are some benefits of it:
Fundraising
investors today are constantly updating their portfolios to support environmentally and socially conscious businesses and leading sustainable practices. Connecting to companies with ESG reports as part of their business portfolios helps mitigate the risk and contributes to gaining better returns.
Positioning
Having a solid ESG proposition leads to the easing of regulatory pressures on business operations. It may help garner more support from the government. Moreover, ESG reporting is an effective way to highlight and present a company’s initiatives, achievements, and success scale.
Top Line Growth
Making a solid ESG strategy with the assistance of ESG advisory firms can help businesses expand in the existing markets and enter new markets as well. Countries are now increasing mandates on the integration of ESG agendas, making it necessary for companies to include their complete supply chain in their ESG report. Earlier companies that may not be mandated to publish an ESG report will now have to do so.
Cost Saving
Adopting ESG strategies can positively lead to direct cost reductions. For instance, it can help with reduced energy consumption and other such advantages. As per reports from trusted sources, executing an ESG strategy can effectively reduce operating costs by up to 60%.
Employee Retention
A well-formed ESG strategy with the help of specialists from an ESG advisory firm lead to attracting and retaining employees in a company. It further leads to enhanced workplace productivity by instilling a sense of purpose among working professionals.
Motivation
Adopting ESG strategies helps increase productivity among employees and attract better talent who are passionate about their work. It contributes to bringing higher profits to the company with performance increases and reduced cost of retention.
Final Words
ESG reporting is certainly a year-on-year exercise, but it can significantly help companies navigate their long-term goals and increase value creation. It is leading to the transition from an extractive economy to a regenerative one. This transition is just starting of long-term social, economic, and environmental development in the capitalist world. The businesses that will adopt these strategies effectively will reap tangible benefits.