ESG: Going from good intentions to concrete results
Whether by conviction or coercion, are you giving ESG (Environmental, Social and Governance) criteria more weight? No matter your motivation, you would be right to do so, because companies that focus on ESG create more value!
An analysis of the financial performance of thousands of ESG-committed companies is a spur to go one better than the regulatory framework. This doesn’t just concern boards: it’s everyone’s business! Here’s how to do it, in five steps:
- Put ESG at the heart of your strategy –not just operations – so you can turn it into a competitive advantage.
- Make the entire board of directors responsible for monitoring ESG.
- Align the company’s purpose with ESG, embed it in the corporate culture and roll it out into management practices at all levels.
- Assign ESG objectives to each department.
- Communicate proactively with investors and anticipate a potential deterioration in results while making these fundamental changes.
Still not sure? Here is another reason: EST-committed companies are more resilient in times of crisis. Such companies held out better in March 2020 when the bottom fell out of the markets, in all likelihood because of their longer-term approaches.
« Social-Impact Efforts That Create Real Value »
by George Serafeim (Harvard Business Review, September-October 2020).
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