ESG (Environmental, Social and Governance) goals are a new and important priority for business. They are also a major opportunity for charities who can help companies deliver them. So here are our five reasons why charities should seize the ESG opportunity

1. ESG is becoming a priority for companies

ESG is often reported as a score that expresses an organisation’s performance in a range of factors including, reducing its environmental impact, increasing diversity and inclusion, and demonstrating good governance in everything from executive pay to investment strategies. With investors, colleagues, customers, and business partners all demanding responsible business activity, companies now recognise the importance of sustainability and ethical business. In the UK, ESG legal requirements (against which organisations will be regulated) are currently being developed and will soon be enforced. 

2. CSR versus ESG 

Companies have had CSR (Corporate Social Responsibility) policies for decades. CSR has historically focused on activities including corporate volunteering, lowering carbon footprints, and engaging with charities. However, ESG goes further to provide more quantitative measures of sustainablity. So whilst CSR activities help companies build awareness of their commitments, ESG provides the evidence to help demonstrate their impacts. 

So, whilst there are some similarities between the CSR and ESG, it can be argued that ESG is a step forwards because it is more measurable. 

3. Charities can help deliver the “S” in ESG 

Large companies sometimes struggle to build relationships with their local stakeholders. This is an opportunity for charities who can help companies engage those stakeholders and make a local and social impact. Also charities are well placed to partner with companies to help them address social issues including labour standards, human rights, racial justice, access to health care, workplace diversity, industrial relations, and supply-chain concerns.

4. ESG positions doing good at the heart of business

There is nothing new about companies making a difference in their local communities. However, ESG is an exciting opportunity for charities because it positions being good and doing good at the heart of business. Making a difference has been a fringe issue for business for too long. The problems for our planet and our society have become even more significant and daunting. It is vital that companies step up their response and ESG does exactly that. This is an important opportunity for charities because it means that the most senior people in a company are now focused on environmental and social issues.

5. ESG can help charities deliver their purpose 

It is all too easy to think that charities do not have to think about ESG, because they already have it covered. However, ESG is not just about your charity’s goals. It is also about what you do on a day-to-day basis. The alignment between purpose and delivery can have several positive impacts. These include making the charity more attractive to potential corporate partners, strengthening its reputation and improving colleague and volunteer morale. 

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