If you think it’s expensive to develop an Environmental, Social & Governance (ESG) plan, you don’t want to know the cost of not having one.
Environmental, Social and Governance analysis is playing an increasingly crucial role in business circles as investment professionals are no longer just crunching numbers before making decisions where to deploy their capital.
Paul Provost, president of Winnipeg-based 6P Marketing, says if consumers, particularly millennials and members of Generation Z, see a company has a poor environmental record or a history of mistreating its employees, they’ll take their business elsewhere.
“People will vote with their wallets. It’s dangerous to not consider the public because they’re a stakeholder in your business whether you know it or not. If you don’t share the same values, you’ll lose the customer,” he says.
To help meet the growing need for accountability in these areas, 6P recently launched Public Trustworks, a specialty division devoted to helping companies measure and build the public’s trust.
Provost says some corporate executives may want to close their eyes and hope that nothing goes wrong on the ESG front but they’ll be playing with fire.
“The danger is if the wrong thing goes wrong, then it turns into a crisis. Now you’re really reacting and that can be much more expensive to correct and rebuild trust (with the public),” he says.
Robert Mensies, senior strategist at Public Trustworks, says because it’s a relatively new phenomenon, every company is at a different stage in ESG adoption.
He says customers don’t expect a company to have a perfect ESG record—it means different things to different people—but it’s important to show that you’re mindful of what matters and on top of any situation that may compromise organizational integrity.
“Most industries are doing good things already but you need to be aware of where you can improve. Track your improvement and hold yourself accountable,” he says.
Think of an ESG strategy being similar to your own personal health plan. “You’re either exercising and eating right or your doctor is reading you the riot act,” he says. “Not everybody will be that proactive but the best of the best are.”
Learn more at publictrustworks.com