ESG basics: Reframing Business for a Sustainable Tomorrow
As conversations around Environmental, Social, and Governance (ESG) increasingly dominate the business landscape, Dataphoria proudly stands at the forefront as Greece's first Analytics-as-a-service platform dedicated to sustainability.
With the debut of our Eco News series, we delve into the most pressing sustainability and analytics topics shaping our world.
The Essence of Sustainability Today
Our environmental impact has reached a pivotal moment. Sustainability is about creating a balance — satisfying our present needs without compromising the future. It’s a concept that must be woven into the fabric of our daily lives and business operations.
When we say that something is sustainable, we're essentially saying it’s everlasting and full of life. For us at Dataphoria, that’s a goal worth striving for.
ESG encompasses the essential aspects of Environmental care, Social responsibility, and Governance. These components reflect a range of criteria that businesses must navigate to not only reduce their ecological footprint but also foster positive social impact and ensure responsible internal practices.
As we confront climate change and societal shifts, understanding ESG basics is crucial for companies to adapt and thrive. ESG serves as a guide for enlightened decision-making, allowing for a sustainable legacy in business practices that benefit our planet and society.
ESG basics in Practice
Delving into the world of ESG translates into tangible actions. Let's explore what this means in practice:
Environmental Integrity: Committing to ESG is a commitment to our planet. It involves reducing emissions, minimizing waste, and combating climate change to protect our natural resources and promote ecological diversity and health.
Social Responsibility: By embracing ESG, companies become leaders in societal change, endorsing human rights, diversity, and creating an inclusive, prosperous workplace.
Governance Excellence: ESG principles push companies to develop robust, adaptable procedures that enhance risk management and uphold the highest standards of governance, prioritizing transparency and ethical profitability.
The Roots of ESG
The origins of ESG date back to increasing environmental and social awareness. In 2004, the United Nations introduced ESG in the “Who Cares Wins” report, emphasizing its significance in investments and setting the stage for the Principles of Responsible Investment (PRI) in 2006.
Next, there was a growing demand for establishing climate and social frameworks and this demand was met with the creation of many boards and organizations with that exact purpose. One example is SASB (Sustainability Accounting Standards Board) which was founded as a nonprofit organisation in 2011 to help businesses and investors develop a common language regarding sustainability and its impacts.
The real game changer emerged from the need for global cooperation and action. In 2015, the UN created the 2030 Agenda, a plan for a creating a better world. It has 17 goals called Sustainable Development Goals (SDGs) focusing on people, planet, peace and prosperity. Also we cannot forget the Paris Agreement, a worldwide deal with aiming to limit planet’s temperature below 1.5°C.
So what about now? Well, the reality is that we need data, data to guide our decisions and we need to start collecting them without delay. As we approach the end of 2023, we see a major push to address ESG issues which is turning into straightforward rules for companies to follow. Companies are now becoming legally obligated to report on their ESG impact. Example of what lies in our way are the likes of Corporate Sustainability Reporting Directive (CSRD), of EU Taxonomy to define what's green, and of European Climate Law aiming for climate neutrality by 2050.
The Value of ESG
Incorporating ESG into corporate strategy is increasingly recognized as a pathway to long-term profitability. Simply put, today impact drives profit.
Consumers are drawn towards green and sustainable products and this demand is driven by the changes in the environment and the society they all live in.
Investors no longer consider only financial factors when choosing their investments but ESG factors as well. ESG is the way to long-term investing and to access a part of investment where profit and good cause intersect. Banks and big financial institutions have already jumped on the opportunity.
Workforce: An ESG-forward company places its workforce at the heart of its operations. Focusing on employee wellbeing, rights, and safety translates to heightened job satisfaction and loyalty, not to mention the magnetic pull it has on top talent seeking meaningful work with a sense of purpose.
Regulatory Environment: Regulatory bodies are active proponents of ESG, evident in the forthcoming Corporate Sustainability Reporting Directive (CSRD) within the EU and national climate laws. At the same time, they reward good sustainability performance with green investments and loans, with tax reliefs and other incentives.
ESG is no longer optional; it's strategic. It's a way through which companies align with modern values, tap into new markets, and future-proof their operations. Far from being a mere compliance exercise, ESG is a strategic opportunity for sustainable growth and competitive advantage.
Embarking on the ESG Journey
ESG is the evolution of 'business as usual,' steering us towards a future where companies can be both profitable and have a positive societal and environmental impact.
We envision a business environment where sustainable innovation is the norm, where operations are designed to be eco-friendlier, and equal opportunities are a given.
The conclusion is clear: profitability and sustainability are not mutually exclusive.
Join us as we continue to explore sustainability in our upcoming articles. Together, we will uncover the transformative impact ESG can have on the business world. Stay tuned for our next piece, where we further navigate the journey towards a sustainable and prosperous future.