What is ESG?
ESG stands for Environmental, Social & Governance.
Consumers, shareholders, and governments are demanding ever-greater corporate responsibility regarding sustainability, environmental stewardship, human rights, equity, diversity, and inclusion. This focus has led to the development of formalized criteria for assessing companies’ commitments to sustainability to allow consumers and investors to identify corporate risks and opportunities.
How is ESG good for business?
In addition to the immediate benefits of implementing an ESG plan such as lowering energy consumption and energy-related costs, the Harvard Business Review* outlined another six major advantages including:
- Driving competitive advantage through stakeholder engagement
- Improving risk management
- Improving financial performance
- Building customer loyalty
- Attracting and engaging employee
- Fostering innovation
* https://hbr.org/2016/10/the-comprehensive-business-case-for-sustainability
How does ESG affect small to mid-sized businesses?
Sustainability is a crucial element of any business strategy and legislation will further drive ESG reporting requirements. For most corporations, the largest gap in ESG reporting data comes from their upstream supply chain, so they must begin to gather data from their suppliers. Small to mid-sized businesses that fail to comply with their downstream partners’ ESG frameworks and targets may jeopardize future business opportunities and forgo the benefits of integrating sustainability into their own organizations.
Next Steps?
- Track your energy usage. Knowing your usage will also help you identify a baseline and set future reduction targets
- Build an internal, cross-departmental ESG team.
- Gather data at a high-level and work your way into the details as needed
- Review your customers’ ESG reports to learn what they’re focusing on
General ESG Resources
Common ESG Frameworks & Reporting Resources
- GRI (common ESG reporting framework)
- CDP (common ESG reporting framework)
- CDP Climate Change 2022 Questionnaire
- Ecovadis (sustainability ratings platform)
- Comparing Common Frameworks
GHG Inventory and ESG Target Setting Resources
ESG Project Funding Resources
- Searchable clearinghouse of federal funding opportunities for energy communities
- USDA Rural Energy for America Program (REAP)
- PADEP Small Business Advantage Grant (SBAG)
- Database of State Incentives for Renewables and Efficiency (DSIRE)
Intersection of Smart Manufacturing and ESG