As chairman of Navana Pharmaceuticals, Anowara Construction Ltd and Gas One, Ronny Zaman is an innovative business leader who recognises all too well the need to embed robust sustainability policies and practices in all of his enterprises. This article will take a closer look at sustainable business practices and why they not only benefit the environment but help to ensure an organisation’s future success in an increasingly eco-conscious social climate.
Environmental, social and governance (ESG) policies are a set of standards used by businesses to track their impact on society and the environment, as well as measuring transparency and accountability. Research from CBI suggests that two-thirds of investors consider ESG factors in investing decisions, highlighting the potential of ESG to help grow a business while simultaneously benefiting the environment and local community. ESG strategies demonstrate a company’s commitment to reducing risks; for example, adapting manufacturing processes in line with future environmental legislation that could make the business a promising candidate for longer-term growth.
The three components of ESG are:
- Environmental
- Social
- Governance
Environmental aspects typically focus on minimising an organisation’s impact on the environment, covering everything from the products or services it produces to its operations and supply chain. ESG allows businesses to target different aspects of the organisation, implementing more sustainable, ethical practices. Examples might include switching to LED lighting, encouraging recycling, developing greener products, switching to sustainable packaging or transitioning to renewable energy sources.
Social ESG aspects focus on how the business impacts the workplace culture as well as the wider community and the world at large. Organisations can make a positive contribution by investing in equal and fair opportunities and providing favourable working conditions. In addition, they can invest in people by providing training and supporting the health, safety and wellbeing of workers; ensuring customer data is secure; preventing abuses in the supply chain; and investing in local community projects.
Governance covers the reporting, logistical and decision-making aspects of running a business. It weighs up the business’s ethical behaviour and transparency, exploring factors such as accurate reporting, accountability, executive pay and diversity of the leadership team. Ensuring good governance can help businesses make themselves more appealing to investors, positioning them for growth and success.
One way businesses can make themselves more socially and environmentally friendly is by implementing a comprehensive recycling programme, reaching out to waste management companies if their local municipality does not operate adequate recycling streams. Private waste-management companies often weigh recycling on removal, making it easier for businesses to track waste levels and report to stakeholders how much they have diverted from landfills.
In addition to improving talent procurement and retention, operating remote and hybrid working policies can result in a major decrease in transportation missions by eliminating the need for workers to commute to work every day. Other sustainable policies could include eliminating paper use; operating zero waste break rooms with reusable cups and biodegradable cutlery; or installing water-saving fixtures, such as rain-sensing sprinkler systems in green spaces outside the office. Simply cutting back on business trips, utilising video conferencing instead, can help companies to not only reduce their carbon footprints but also simultaneously achieve significant cost savings.
As the world grapples with the irreversible impacts of climate change, businesses are coming under increasing pressure to adopt more sustainable models. Created in 2015, the UN General Assembly Sustainable Development Goals essentially serve as a roadmap for business sustainability in target areas such as environmental degradation, climate change, poverty and inequality. In an unpredictable world, it is more important than ever for businesses to fundamentally rethink the way they function, embracing sustainability as a critical component of their operations and business strategy.