Working at Savills over the last five years has made me more aware than ever of the business case for embedding Environmental, Social and Governance (ESG) into the workplace. As standard, this is the set of criteria that the socially conscious use to pick and choose who they are willing to work with and can therefore help to determine the future financial performance of a company.
Like most firms, regardless of size or available resources to implement these changes, the case boils down to a different set of risks and opportunities, which in my experience are unique to the culture of each business. So why is ESG now so important and what impact can it have?
1) Brand Reputation – the world is changing, our clients, shareholders and our employees are more concerned with how businesses protect the environment and deliver positive and enduring social impact
2) Compliance – businesses need sufficient skills and access to data to meet tightening legal requirements for protecting the environment, such as mandatory Green House Gas reporting, Streamline Energy and Carbon Reporting (SECR), Energy Savings opportunity Scheme (ESOS) and Minimum Energy Efficiency Standards (MEES).
3) Attract and retain new staff – it did not surprise me that a recent staff survey indicated that sustainability in the work place is important to employees. People often discuss the changing values of millennials and gen Z and, like many companies, we wish to keep pace with these expectations. Happy staff in spaces which promote their wellbeing also help to improve productivity and prevent absenteeism, which World Green Building Council (WGBC) studies have indicated can help to improve business profitability.
4) Attract and retain clients – having a shared ethos with clients and investors is key for many businesses. We find that more and more Request for Proposals (RFP) ask questions relating to ESG.
5) Maintain market leader status –ESG can be a valuable tool not yet realized by most. As the sustainability, wellbeing and social value fields continue to evolve there is a lot of potential to communicate new research and initiatives
6) Business Running costs – what are we using, what are we wasting and what is this all costing us? Paper, electricity, petrol; you name it most companies can cut it down and save a tidy sum.
Finally, can we afford not to do this? As people become increasingly aware of ESG and its influence, can you ignore something that can directly affect your employees, clients and ultimately the perception of your business?
This article is written by Lizzie Jones, Sustainability Director, Savills UK