For some companies, sustainability is a driving principle behind what they do every day. For others, it may feel like a goal that requires more investment than you can afford. But we believe that’s far from the truth. In fact, making environmental responsibility a core value for your company may be exactly what helps you grow from strength to strength. How? It’s all about ESG.
ESG (Environmental, Social, and Governance) is an acronym that has become increasingly prominent in the realms of investing and business operations. But what lies behind these three letters? In essence, ESG represents a holistic assessment of a company’s impact on the environment and on society, including a focus on its management practices and operations. It assesses and marks an organisation’s sustainability or responsibility, giving transparency to your peers, clients and customers. So how can you ensure you’re hitting the right marks? Let’s delve deeper into ESG and its significance, shedding light on how it’s shaping the landscape of sustainable finance.
ESG, when compared to traditional Corporate Social Responsibility (CSR), is a more encompassing approach. It evaluates not just private companies but also governmental institutions, communities, and even individuals. This evaluation compares each organisation, showcasing their respective impacts on society and the environment.
ESG and attracting investment
When it comes to investors, they look closely at ESG, especially if they promote social responsibility in their portfolios. SRI (Socially Responsible Investing) is a growing trend among this market, with individuals and conglomerates alike seeking investment opportunities that align with their values. The driving force behind the increasing adoption of ESG lies in the realisation that investors, both small and large, have a role to play in addressing global issues such as climate change, water scarcity, and fair labour practices. ESG-conscious investors recognize that they can contribute to solving these problems by supporting responsible companies. Sustainable investing aligns with ESG as a global trend that encourages responsible investment decisions.
Investors are increasingly considering a company’s ESG performance as a crucial factor in their investment decisions. It’s not just about the potential for financial returns but also about the long-term sustainability of their investments. Companies that excel in ESG factors and issues are seen as more attractive investment opportunities, while those that lag behind face risks in terms of legal, financial, and reputational repercussions. These risks extend beyond the non-compliant company itself and can also affect its business partners. ESG helps the investor quickly decide which companies are performing responsibly, and therefore promotes their own reputation to the business and consumer audience. For businesses seeking investment, this means achieving the criteria can reap huge rewards.
So how can you ensure you’re putting your best foot forward? It starts with understanding the three main categories that the ESG criteria encompasses.
This category focuses on evaluating a company’s ecological impact, including their use of raw materials, greenhouse gas emissions, and the rate of innovation in environmentally friendly practices. ESG ratings also consider the company’s efforts to reduce its environmental footprint.
The social criteria assess the level of social responsibility demonstrated by the company. This includes evaluations of working conditions, adherence to human rights principles, and the societal impact of the company’s products and services.
Governance criteria concentrate on the company’s management practices. They encompass internal controls, adherence to established standards (e.g., ISO certifications), supplier responsibility, and overall corporate management.
Leading by example
We’re proud that our environmental principles are part of the Lindström DNA, so integrating ESG principles into our operations has been important, and simple all at once. We are always aware of the environmental impact of our business, and continually take steps to not only reduce that impact, but help our customers to do the same. Our commitment to the circular economy is reflected in our approach to workwear.
Lindström designs and provides ecological workwear that allows all our clients, big and small, to comply with the most stringent hygiene and safety standards. So it begins with our manufacture, ensuring that we create textiles and workwear built to last longer, and replace disposable choices.
But it doesn’t stop with choosing the right workwear to begin with. We’re here for the lifespan of your uniforms and textiles. Through regular cleaning, washing, and repair of these garments, we can extend their lifespan, reducing textile waste and saving energy. Not only that, but rental, repair and recycling can save our customers money in their businesses. By making the environmentally responsible option affordable, we’re dedicated to empowering every business to take sustainable steps. Of course, our workwear needs to keep people safe and comfortable, first and foremost. So when a garment can no longer be repaired, we know that replacements are a must. But that’s not the end of our efforts. We take that old workwear and ensure each piece is recycled to create new products, ensuring minimal waste and maximum sustainability.
So whether you partner with us to improve your sustainability standards, or go further to address your own company impact, it’s important to remember that ESG is more than just an acronym – it’s a framework for assessing and promoting sustainability, responsible investing, and ethical business practices. We know that ESG principles can be integrated into the very fabric of everyday operations, offering both environmental benefits and potential for long-term business success.
By considering ESG scores and reports, investors and businesses alike can make more informed decisions, mitigating risks and embracing opportunities for a more sustainable future. Whether it’s environmental impact, social responsibility, or corporate governance, ESG considerations are driving positive change across various sectors, offering a path toward a more responsible and sustainable future.