What is ESG? The 14 themes your business should know in 2024

ESG

The term ESG has become a buzzword in the corporate world, prompting businesses to reevaluate their practices. Many are being asked by their large customers for policies and data covering Environmental, Social, and Governance (ESG). However, many companies find themselves asking, “What exactly does ESG stand for?” In this blog post, ThisRock ESG Consultants dive into business sustainability, and break down the 14 key themes that make it up in the real world. The next time a customer adds ESG questions into their RFPs, you’ll be ready. 

Understanding ESG: What is it?

Before we hop into the core of ESG, let’s take a moment to understand why businesses in Canada and the USA are increasingly adopting sustainability. The driving force behind this shift is often the demands from major stakeholders, including customers, bankers, investors, and even employees. For example, General Motors (GM) has asked Tier 1 suppliers to pass EcoVadis and have environmental and social practices and targets. In a world where sustainability is a growing concern, big companies need to see transparency, responsible practices, and a commitment to environmental, social, and governance responsibilities.

Breaking Down ESG: The 14 Themes

Let’s unravel the 14 essential elements that make up ESG. Your customers, investors, bankers, and employees are likely to ask you about these things in 2024. 

  1. Energy: How efficiently does your business use energy, and what steps are you taking to reduce energy consumption?
  2. Water: Are there policies and metrics in place to manage and reduce water usage across your sites?
  3. Waste: What strategies does your company employ to minimize waste production, and how are waste materials handled?
  4. Encroachment: How does your business address concerns related to encroaching on natural habitats or protected areas?
  5. Non-Greenhouse Gas Emissions: What measures are in place to minimize emissions other than greenhouse gases?
  6. Greenhouse Gas Emissions: How is your company working to reduce its carbon footprint?
  7. Sustainable Procurement: What steps are taken to ensure that the materials and services your business procures are environmentally and socially responsible?
  8. Employee Wages: How does your company prioritize fair wages?
  9. Health & Safety: How does your company prioritize employee well-being, and workplace safety?
  10. Terms or Contracts: Are the contractual agreements your business engages in fair and ethical?
  11. Diversity, Equity, and Inclusion: What initiatives are in place to foster diversity, equity, and inclusion within your organization?
  12. Community Involvement or Giving Back: How does your company contribute to the communities it operates in, and what philanthropic efforts are in place?
  13. Governance: What measures ensure ethical business practices and transparent governance within your organization?
  14. Bonus for Positive Impact: Does your company provide incentives or bonuses for initiatives that have a positive impact on people and the planet?

Navigating ESG Inquiries: Policies and Data

When faced with inquiries about your company’s ESG practices, stakeholders will likely ask about the existence of policies and the availability of data. For instance, if questioned about water usage, having metrics for the past two years, a new policy on water efficiency training for employees, and a target to reduce water consumption by 10% in the coming year will showcase your commitment.

Simplifying ESG for Your Business

ESG is not complex. It consists of 14 core themes that make up the principles of sustainability and responsibility. By addressing these themes and providing clear policies and data, your business can demonstrate its dedication to making a positive impact on the environment, society, and governance. Why? Your customers will stay your customers. You’ll win more RFPs. You will attract and retain employees. You’ll have a differentiator in the market. As stakeholders increasingly demand accountability, embracing ESG becomes not just a necessity but a strategic move towards a sustainable and responsible future. So, the next time someone asks you about ESG, you can confidently share these 14 key themes that embody the essence of sustainable business practices.

Ready to get started with ESG at your business in 2024?

Our sustainability consultants can help you with a materiality assessment, ESG strategy, and communications for your employees and for your website. Check out our Services. We can become a fractional part of your team for a few months. Beginner? We offer a 1-Hour Initial Sustainability Audit + Report for just $995. Contact us to learn more.