The Important Role Of ESG In The Future Of Business — Alexandra Morehouse
ESG — a recurrent initial in business discussions — refers to how an organization explains and measures its impact in three areas. These are environment (e.g., carbon footprint), social (e.g., gender pay gap, diversity), and governance (e.g., policies that ensure that the legal compliance is adhered to). In recent years, investors have been observed to be increasingly apply and analyzing these non-financial factors when identifying growth opportunities.
“Everybody is reading about ESG in the news and it’s in every boardroom discussion. I prefer to think of ESG as its older term — people, planet, and profit. So, how can a company keep in mind, and do well in all three aspects? They are not mutually exclusive. The ‘E’ is the environment; how well is your company sustaining environmental practices. The ‘S’ is social; are you reflecting diversity and inclusion in your governances, boardroom, and in senior leadership teams?
“It is very important in today’s business because of the straightforward reason that if you are not showing up in a favorable (beware of the UK vs US spelling!) light in any of these — people, profit, or planet — customers will stay away and you will lose business. Additionally, in a competitive labor market, you will not be able to retain the best and the brightest.
“Early 2022, The SEC has mandated sweeping disclosure on ESG. The temptation in the face of that is to view ESG as a necessary hurdle you need to audit and put forward. It is important to look at ESG as a vision for how we can improve our collective future.
“Implementing ESG strategies means implementing change.
“My observation tells me that those changes happen most smoothly when the vision is held at the enterprise level, but the actual day-to-day changes are held at the management level. This means how the operators of the management level think daily about the environment (e.g., environmentally sustainable practices), social (e.g., diversity and inclusion) and governance (e.g., hiring and promoting employees) aspects of their company.
“I think this is the easiest way to think about how you lie around changes in big and complex organizations”.
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More about Alexandra: Alexandra Morehouse is a mission-driven collaborator and seasoned board member, with deep experience in governance, risk management, and digital transformation. She currently serves as the chief digital officer and chief marketing officer for Banner Health and is a national thought leader in diversity, equity, and inclusion.
