Understanding the “E” in ESG

Climate change, environmental stewardship, and sustainability are at the forefront of mainstream consciousness. 

Many of today’s customers want to support companies that are working towards reducing their environmental footprint. Similarly, investors and stakeholders want to put their investment dollars into organizations that share the same environmental values and have the transparency results to back their claims. This is all happening as government bodies impose more regulations and restrictions on businesses to ensure more responsible environmental impact. 

It can be challenging for businesses and organizations to demonstrate their environmental responsibility and other forms of sustainability. This has given rise to a framework called Environmental, Social, and Governance (ESG) to help define these concepts and values. 

Environmental, Social, and Governance (ESG) Explained

Here is a brief rundown of the three main parts of ESG:

• Environmental: This is the measurement of an organization or business’s environmental impact and sustainability.
• Social: The “social” part of ESG measures a business or organization’s interactions with its employees, suppliers, customers, and community. 
• Governance: “Governance” refers to how the top level of a company governs it, including topics like executive salaries, transparency, and conflicts of interest. 

Organizations must create a strategy for each part of ESG. In this article, we will take a closer look at the “E” in ESG — the environmental side. 

What Is the “E” in ESG?

The Environmental part of ESG is the first part of the acronym for a reason. It’s highly important and often one of the first things customers and stakeholders look for in the businesses they choose to buy from and invest in. 

Here are some ESG environmental factors to be aware of for your business or organization:

• Carbon emissions
• Pollution
• Resource management
• Material disposal
• Sustainability practices
• Energy & operating efficiency
• Future environmental goals

As you’ll see below, your environmental ESG approach can come from your own values, but they often stem from outside preferences, laws, and values you’ll have to appease if you want to stay profitable and compliant as a business. 

5 Reasons Why the “E” in ESG Matters

Neglecting the “E” in ESG comes with many environmental risks in business that you want to avoid. Here are five of the biggest reasons why caring about ESG environmental topics matters:

1. Customer, Investor, and Community Scrutiny

Businesses experience some pressure from their investors, customers, and the surrounding community to reveal their environmental impact. These parties want to know if your business demonstrates sustainable, responsible practices across facilities and processes. Here’s a closer look:

• Customers: Today’s customers have more awareness than ever about the importance of sustainability and environmentalism. They want to lessen their negative impact on the environment, and they can do so by buying from companies whose environmental values align with their own. 
• Investors: Investors may see a positive relationship between a company’s financial performance and its environmental practices. 
• Communities: Global and local communities are directly experiencing major negative effects from environmentally careless companies and now tolerate environmentally responsible businesses.

2. Brand Reputation

Your environmental strategies can directly impact your brand reputation positively or negatively. Today, news of environmental problems or disasters travels across the internet and news outlets almost immediately, demolishing implicit brands in the process. Customers may respond to such events by boycotting, and investors often back out of deals to find a more environmentally stable company in which to invest their capital. 

Conversely, businesses that improve their environmental stewardship can improve and solidify their reputations. Even a company that experienced a loss in brand reputation can regain it by holding themselves accountable and shedding light on actions taken that give them more positive environmental publicity. 

3. Rules and Regulations

Many of today’s political agendas involve preventing and offsetting environmental harm. You can reduce risks and increase advantages as laws change by anticipating environmental problems and seeking solutions before problems occur. You’ll gain better autonomy as lawmakers see your business as one that is already positioned within regulations. 

You want to avoid government intervention in your business and operate with healthy autonomy. When you focus on the “E” in ESG for your business, you ease regulatory pressure and can foster healthier relationships with the governing bodies that set environmental rules within your industry. 

4. Efficiency and Investment — Profitability in Sustainability

Your company can reduce spending by practicing resource management and energy efficiency. By making changes to reduce environmental impact, you can avoid destructive or expensive environmental incidents. You can also save money by minimizing waste and implementing creative recycling initiatives. 

Investors will see these actions and results as signs their capital investments will be safer and go farther if they invest in your company. Investors want to reduce their financial risk and get the biggest return on their investments, and you’ll check both those boxes when you save money and increase efficiency with good environmental practices. 

5. Employee Engagement

A sustainability culture within your business can inspire employees by letting them participate in something that positively impacts their world. If you adopt environmental sustainability as one of your core business goals, you can align your company culture with many of your employees’ values. 

This is even more true if you let employees report sustainability issues and suggest changes, as they are often the ones most often engaged with workplace processes and supplies. This also lets employees make a true difference while increasing their value to the entire company. 

How SitelogIQ Helps Level Up the “E” in an Organization

At SitelogIQ, we help organizations achieve greater sustainability and environmental stewardship to support your commitment to the “E” in ESG. Your facilities and practices can reduce any negative environmental impact while attracting more investors, keeping employees satisfied, and safeguarding the community’s wellbeing. 

Here’s what we cover with our solutions:

• Portfolio analysis and capital planning
• Program management
• LED lighting and controls
• Efficient water fixtures
• Electric vehicle charging
• Energy Generation and storage
• Solar photovoltaic solutions
• Smart irrigation
• Smart thermostats
• Project financing
• Use of technology to track consumption data

Learn More About What We Have to Offer

The team at SitelogIQ has one main purpose — to make buildings better by reducing environmental risks in organizations in public and private sectors. We help make sustainability and company improvement processes easier by ensuring buildings are efficient, saving you money and reducing your impact on the environment. With our solutions and energy expertise, you can make a difference in the lives of your employees and your community. 

Contact us today to learn more about what we can offer your business to help you prioritize the “E” in ESG.