To be or not to be… talking about ESG. One’s ability to articulate the importance and benefits of investing in ESG and its alignment with Benefit Corporation standards dramatically affects the perception of a company. So, how does one talk about ESG and B Corps? Understanding the importance and benefit of the E, S, and G in ESG within and outside of the company and its connection to being a B Corp is a good place to start.
ESG stands for Environmental, Social, and Governance. The three pillars in B Lab U.S. & Canada’s Theory of Change includes climate justice, racial equity, and a stakeholder economy, which are all affected by ESGs. Climate justice means that those who are least responsible for climate change are the most likely to be affected negatively by climate change. ESG investing in corporate culture is crucial in the fight for climate justice because of the environmental, social, and governance focuses. According to the CDP, climate-related weather events are expected to cost businesses $1.3 trillion by 2026. Therefore, it should be a primary focus of businesses to curb climate change. Polling shows that a majority of Americans agree with the values behind ESGs however talking about ESGs and B Corps becomes complicated when people don’t fully understand what a B Corp or ESG is or does.
By breaking down the Environmental aspect, Social aspect, and Governance aspect of ESGs and the main goal of B Corps, the appropriate way to communicate about ESGs and B Corps will become clear. The main idea is that the more informed you are about ESGs and B Corps, the more you will be able to speak about them to those who may not know the same information. Be informative, and be informed when talking about ESGs and B Corps.
E is for Environmental:
The environmental aspect of ESG involves sustaining our current environment and improving the environment to increase quality of life. A circular economy is crucial in this aspect of ESGs. 88% of consumers will be more loyal to a company that supports social or environmental issues, according to Cone Communications. Reducing carbon emissions, reducing waste, and pollution are all aspects of the E in ESG. To talk about the E in ESG, focus on sustainability efforts and environmentally friendly aspects.
S is for Social:
The social aspect of ESG involves human rights and equity. The way organizations affect individuals and communities need to be evaluated so that harm is limited or eliminated. 76% of consumers say they will stop buying from companies that treat the environment, employees, or the community in which they operate poorly, according to the PwC. Social issues deserve attention and the S in ESG deals with promoting and improving social issues. To talk about the S in ESG, focus on inclusivity and justice in business social practices and beliefs and values.
G is for Governance:
The governance aspect of ESG involves policy and the way systems work. The way an organization is run affects ESG goals and outcomes. ESG strategies can affect operating profits by as much as 60%, according to McKinsey. Measuring the work done in other sections of ESG is considered to be governance. To talk about the G in ESG, talk about policy and procedures within the organization and how they promote the S and the E in ESG.
B Corp is for Benefit Corporation:
B Corp is short for Benefit Corporation, and B Corps abide by their title by promoting the benefit of the planet and the people of the world. For the B Corp community, climate justice is a priority in the fight against climate change and an influencing factor in ESG sectors in respective organizations. B Corps prioritize all pillars of B Lab U.S. & Canada’s Theory of Change and ESGs assist in that process of prioritization. Impact is exacerbated by B Corps and ESGs and the ability to talk about them properly promotes the mission.
In conclusion, ESGs are beneficial to not only the community and the environment, but also to businesses and their profit. B Corps operate on ESG guidelines to promote the three pillars of the Theory of Change, which include climate justice, racial equity, and a stakeholder economy. Talking about ESGs and B Corps in the proper light and context will promote the initiatives of B Corps and ESGs and lessen stigmatization in the field.