From CSR to ESG: How your business should be reporting sustainability
27th October 2020
2020 has brought into sharp relief the importance of sustainability. Businesses of all sizes are under scrutiny to play their part as the UK looks to reduce its emissions to net zero by 2050.
Corporate Social Responsibility (CSR) has long been the label for sustainable business practice, but as the climate crisis has worsened, it’s clear that CSR is no longer enough.
To meet the UK’s emissions targets, and to evolve the role of business sustainability, a new term has been coined: Environmental, Social and Governance (ESG). Together, these three categories allow businesses to measure their social and environmental impacts.
ESG is measured, quantifiable and criteria led, and is used by 93% of the world’s largest companies. Using ESG allows businesses to better understand the lifecycle impact of their products on services; for example, the amount of waste which has been recycled.
In the highly scrutinised aviation space, Gatwick Airport uses ESG measures. In 2019, the corporation’s sustainability report highlighted its successes across ESG: 71% of waste recycled, 62% of flights by the quietest aircraft to reduce noise pollution. These changes are foundational, the building blocks for a more sustainable future for Gatwick, which retained its Level 3+ “neutral” Airport Carbon Accreditation, achieving net-zero emissions the previous year.
ESG and profit
Recently, markets have transformed to reflect this conscious shift, as ESG strategies are associated with good financial performance.
While ESG isn’t about making money - focussed as it is on ethical practice and sustainability - it can entice support, either from investors or consumers. More consumers are choosing socially responsible organisations which reflect both the social milieu and their own personal values and are willing to pay more for sustainable products or services. This investment pays two-fold: financially now, and in a better future for the planet.
In 2020, as the COVID-19 pandemic dominated the news agenda, many people feared that ESG would take a backseat as businesses fought for survival. But sustainability has been the real winner. We’ve seen the positive impact that reduced travel and industrial activity has had on our environment, but the pandemic also taught us to check in on the people around us, to care for our communities and to put a greater focus on employee wellbeing.
ESG is about showing that ethical principles lie at the heart of your business, and that you’ll use your power and platform for change.
Our parent company, Drax was the first organisation in the world to commit to carbon negative by 2030, and put our local communities first in response to the pandemic by donating money to schools and cancelling energy bills for more than 170 small care homes.
All businesses have a responsibility to address the criteria laid out by ESG. Sustainable change is best made through investment.
Proving that sustainability delivers a measurable return on investment
Sustainability is increasingly important to businesses, but how can you be sure that the investment you make pays back? Research recently carried out for...
Building a business case for change when switching electricity supplier
Committing to being more sustainable as a business, and then delivering on that promise, can be challenging – especially when starting your programme of...
Whitepaper: How enterprises are bringing about change after COVID-19
We surveyed over 1,250 business leaders about their attitudes to sustainability, where their priorities lie, and how they plan to embrace bold decision-making, post-pandemic....