ESG is fast becoming a hot topic in workplaces across the globe, where all businesses – large and small – are expected to get proactive on ESG measures to fulfil the increasing expectations of regulators, investors and society.
ESG, or Environmental, Social and Governance, centres on sustainability and highlights an organisation’s responsibility to embed this into their business in a way that adds value, ensures responsible business activities and meets stakeholder expectations.
Pressure will be put on business owners as Governments step up legislative, investment and regulatory measures to achieve net zero targets by 2050. Pressure will also flow as global regulatory policy shifts.
Additionally, eco-conscious employees, customers, investors and contract providers are increasingly looking to partner with socially and environmentally responsible businesses. Those slow to move may lose out to competitors.
SMEs that fail to embed sustainability practices into their operations run the risk of losing lucrative contracts from Governments and large businesses who are already starting to scrutinise the green credentials of their supply chains.
Where do I start with ESG?
This is a question SMEs increasingly are asking their business advisors. The report thinkBig Your guide to sustainability and ESG provides a range of practical insights to help SMEs come to grips with the strategies, advantages, risks and opportunities around sustainability within their business.
All businesses are different, so there is no one-size-fits-all approach when it comes to sustainability. Processes have been developed to guide businesses throughout their entire ESG journey, with the first step being an assessment of ESG maturity and the consolidation of all existing ESG activities the business may already be doing through its general activities.
From there, businesses should develop an ESG scorecard. Organisations that go on the front foot by creating this scorecard will have made a great start towards staking their ESG credentials and goals.
The challenge for SMEs is to future-proof their business by going green while ensuring they minimise the potential for risk.
That is why it’s important to stay on top of impending government changes and funding incentives that will support SMEs in achieving their sustainability goals.
SMEs need to be proactive and consider developing a sustainability roadmap that highlights their ESG goals and initiatives.
ESG in action inside a business
Our report shared the steps five successful Australian businesses have taken on their ESG journeys and the practical ways they’ve put sustainability into action.
A great example is Mackenzie Marine and Towage, a third-generation harbour towage and pilot boat service in Western Australia. This business was initially confused about sustainability and how to relate it to its day-to-day operations and business goals.
We worked with them to develop a sustainability report that gave them clear direction, not only for the short term but also got them thinking about the longer term, particularly in relation to the technologies (such as hydrogens and other fuels) that might be available to the business in the future.
Now when the business purchases new assets, Mackenzie ensures the assets can accommodate new technologies as they become commercially available. Applying this style of thinking to their direct fuel use, energy suppliers and waste management practices has helped it come to grips with ESG and strengthen its sustainability credentials.
In your business, you might start with just a few small ESG changes. Or you might use the opportunity to revolutionise your entire business. The key is to join the business ‘greenscape’ now so you’re well-placed to maintain existing contracts, tender for new ones and be ahead of any impending ESG regulations.
