Sustainable business is good business. And many organisations recognise the benefits of doing business in a fair and environmentally conscious way. Others have benefitted from this trend in their communications, without, for the most part, needing to substantiate their claims. However with the clamp down on greenwashing from regulatory bodies like the FCA, and the increasing number of accusations of greenwashing made against large organisations, from banks to retailers and oil producers, companies will want to make sure every sustainability claim they make is backed up by evidence and data. So how can businesses go about becoming more sustainable in a secure and data proven way? Below we share seven steps to consider as part of your organisation’s transition to becoming a more sustainable business.
1. Incorporate ESG into your business strategy
It is becoming increasingly important, and in some cases mandatory for organisations to consider their impact on and the impact of environmental, social and governance standards of their business practices. ESG is on the radar of employees, regulators and crucially, investors and clients, who are becoming more inclined to invest and work with companies that show their commitment to making their business more sustainable. If good ESG practices are incorporated within your business strategy and is not just a form of greenwashing, it is likely your organisation will be more attractive to stakeholders, which in turn makes it more sustainable.
2. Consider your consumption
Being carbon neutral is a crucial step in turning your company into one that is more ecologically friendly. This can be accomplished by reducing emissions and encouraging co-workers to commute to and from work without contributing carbon emissions to the environment. Being environmentally sustainable can be accomplished by switching to renewable energy sources or simply by reducing your energy use.
3. Gain accreditations
A well-known accreditation for organisations to show their commitment to positive change is B-Corp. Described by PwC, “B-Corp is to business what Fair Trade is to coffee”. To become a B-Corp, you are measured against your social and environmental credentials, public transparency and legal accountability; making sure profit and purpose of the organisation align. There are over 4000 certified B corporations globally, in 70 countries and 150 industries but despite the wave of new businesses receiving this accreditation, it is becoming increasingly difficult to gain B-Corp status. You may prefer to find alternative accreditations that assess similar social and environmental impacts of your business. Communicating ESG credentials and certification is a way to build confidence, value and integrity for your business.
4. Focus on your employees
Employees are the heart of a business, and they are the ones working to drive profits. It’s in an organisation’s best interest to develop modern workplace policies that support the diversity of the workforce. Gain an understanding of how your organisation can help them as individuals. This may include allowing hybrid working, equal pay, competitive wages, and other additional benefits to support their daily lives. Creating modern, fair, work policies shows employees and potential employees that they are respected. And when a business retains and attracts motivated individuals, so does the business’s bottom line.
5. Communicate with stakeholders
There are several advantages of communicating your sustainability credentials with investors and business partners. Talking to stakeholders is crucial for creating long-term value because they may offer valuable feedback on how to improve sustainability and what potential investors are looking for. When external stakeholders and suppliers see your commitment to driving sustainable change, they too may also become more sustainable, to align closer to your business. Having sustainable clients and suppliers will not only make your business more appealing to investors, but it will also increase your credibility.
6. Accountability
As ESG credentials are becoming more widely discussed, it is imperative that organisations carry through on their sustainability commitments. One way that has been openly discussed is tying incentive programmes to positive ESG outcomes. This could be key for organisations working towards more sustainable business practices, making them more commercially robust in the long term. Clients and investors require security and open communication; if they do not get these, confidence is lost and they could feel less assured with your organisation than they would be in an alternative company that holds itself accountable to its commitment to sustainability.
7. Reach out for guidance from a specialist company
For companies looking to align their business practices to their ethos, seeking consultation from experts can be a good place to start. Conducting a review of your organisation’s credentials is the first step towards building a secure and transparent business strategy that will be attractive for clients and investors and boost revenue in the future.
Article by George Martin
George is currently undertaking a masters degree in Public International Law at the University of Nottingham. He provides paralegal and research assistance to the legal team at Prospect Law.
If you’re looking to audit your company’s activity, The Prospect Law ESG Audit provides clients with a rigorous and objective analysis of their current ESG credentials. The Audit has been designed to identify the steps our clients can take to make improvements in ESG compliance.
Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.
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This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.
