What Is ESG?

Last modified: 01/21/2022

When reflecting on the current state of the world – with warming temperatures and rising seas, and corporations’ significant contribution to these woes… trying to keep things “business as usual” is no longer an option. We’ve all seen the headlines… Carbon Neutral by 2050, Net Zero Carbon by 2030, Net Zero Energy by 2025. Stakeholders, investors, and consumers alike are asking more of businesses, demanding that they consider the environmental and social impact of their operations in addition to profit. Sustainability, resilience, and corporate responsibility have emerged as leading indicators of a successful company. What once was a bottom line is now a triple bottom line: people, profit, and planet.

While tracking and forecasting profit is nothing new for businesses, keeping tabs on the other two ‘p’s’ in the triple bottom line – people and planet – is often a foreign concept. That’s where Environmental Social Governance (ESG) Reporting comes in. ESG Reporting provides a framework for businesses to assess the current state of their environmental and social impact, disclose this information to the public, set tangible goals for continuous improvement, and track progress over time. ESG gives businesses the opportunity to honestly evaluate their impact and openly share their journey.


What is ESG?


Now that we have broken down ESG (Environmental, Social, Governance) and we know that many companies are making ESG commitments, let’s dive into it! Businesses that choose to make ESG commitments are going to notice the change from within first. Company policies, procedures, and marketing strategies will shift to focus on sustainable initiatives.

ESG can have an immediate positive impact on employees by improving their morale and productivity. Team morale can do wonders for innovation and productivity, supporting a healthy business. Workers are more likely to bring their best self to work if they support the company values and are compensated fairly. This is more important now than ever – no longer will workers accept strained, unfair, and unethical working conditions. The pandemic has sparked a revolution of reflection and demand change. And this change at the individual level is crucial – after all, companies are just a collection of people who are inspired to do something bigger than themselves.

Having substantial ESG initiatives can set companies apart from their competitors. Customers recognize this healthy competition and overall are holding companies more responsible for addressing climate change and social issues. Buyers are using their power to vote with their dollar and drive change. Shoppers want to feel confident that their products are sourced responsibly with environmental and social impacts in mind.

This is how ESG stretches beyond the business and positively impacts society and communities. ESG reduces pollution, preserves Earth’s resources, and creates new opportunities. This means that ESG has a positive impact even on those who do not purchase the product or service.

Now to break down the ES, and G in ESG Reporting:

E refers to a company’s environmental impact, including its carbon footprint, water consumption, waste management, natural resource extraction, material use and impact, etc. This is where Davies comes in! We give our clients detailed reports on how much carbon they are saving from the environment by purchasing remanufactured office furniture from us.

S refers to a company’s social impact. This may include a company’s community impact, volunteering initiatives, diversity and inclusion, emergency response planning, and workplace health and safety.

G refers to corporate governance, which includes company procurement, DEI (diversity, equity, and inclusion) commitments and initiatives, stakeholder engagement, company policies and values, and supply chain management.


Let Us Help You Tell Your Story

Environmental, Social, and Governance (ESG) might initially seem complex, but fundamentally ESG is a storytelling exercise — collecting all the wonderful stories about your company making a conscious choice to make a positive impact on people and the environment (and we can help you share it in a beautiful report!). ESG reporting is an absolute must for companies to assess, track, and enact positive social and environmental impact. We have worked toward positive ESG impact since our company’s founding, and we are thrilled to help others do the same.


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