Blog | ESG Pulse: The Newest Resource to Protect Your Assets
Do you know the risk of not knowing environmental, social and governance (ESG) concerns? If not, you wouldn’t be alone. Companies have failed to prioritize ESG in the past due to lack of understanding or the complexity of the task. Now, however, it is imperative for businesses to understand the value of properly monitoring ESG as it becomes an increasingly important factor in today’s market.
Harvard Business Journal found companies that successfully manage ESG risk outperform the market by 6%. Companies that are able to accurately assess these factors yielding a significant return on investment.
Consumers and investors are more eager than ever to reward brands that make sustainability and transparency a priority. These returns ultimately impact not just the company, but strengthen local communities and elevate standards in the larger market. As explained in a report from NYU Stern, "...investors, if equipped with reliable, accessible information, are in a unique position to identify and reward companies with strong social performance, thereby creating incentives for companies across an industry to upgrade their operations in a way that improves human rights and strengthens societies."
With more scrutiny from consumers as well as government and regulatory organizations, businesses need to be on high alert when it comes to monitoring and understanding ESG.
ESG Pulse provides the solution to real-time monitoring for maximum risk mitigation, businesses reputation protection, driving employee and customer loyalty, and improving top-line performance.
Why is ESG management such a determining factor in your company’s success?
Every business comes with a certain amount of risk, but the most resilient companies are the ones that can reduce risk through consistent monitoring. Health and safety risks, supply chain concerns, and product quality all need to be overseen on a daily basis. In addition to the daily concerns, unforeseen events such as extreme weather and accidents must also be factored into an overall assessment.
The consequences of failures in ESG can be dire, including fines, loss of consumer and investor confidence, and falling stock prices. Companies that want to protect their reputation as well as critical assets need to be aware of their risk factors in order to address concerns before they become critical. This is why real-time assessment is crucial to proper ESG management.
72% of investors believe metrics on non-financial risk are vital, while 82% Of investors see ESG information as financially material to investment performance. When failures can mean damage to valuation, investors are more likely to favor the presentation of accurate ESG data.
Narve Reiten, Founding Partner, Reiten & Co noted, “Over the past years, it has been proven that companies with top performance on ESG factors adds alpha to company value and are subject to premium valuations in the market.”
ESG management is becoming a major factor in determining the overall vitality of a company. In fact, top ESG companies outperformed those at the bottom by 40%. By safeguarding your assets and improving efficiency, ESG insight can make your company even more attractive to those fastidious investors.
Consumers today are not just looking for great products, but whether or not a brand uses ethical labor and responsible environmental practices. With 66% of consumers willing to pay more for products and services from companies that are committed to environmental and social impact, sustainability has become a driving force in the bottom line.
Along with consumers, loyalty lives within the company walls. Not only do consumers want more transparency when it comes to environmental and social concerns, but monitoring these and governance factors — like disclosure and compensation— help companies recruit and retain top talent.
How can companies effectively monitor ESG?
Until now, traditional methods of determining ESG factors have been time-consuming, confusing, and incapable of capturing real-time insight. With many moving parts, regulations, and concerns that span the entire supply chain, ESG has been more of an afterthought rather than a valuable resource for many businesses.
ESG Pulse is a solution that is simple to use, integrates seamlessly, and makes it easy for businesses to gather and interpret ESG insights.