Do you have a business or organization and have been wondering how to enhance its performance? One of the proven strategies you can adopt is ESG reporting. This is disclosing the social, environmental, and corporate impacts of a company. The process involves developing clear goals and strategies for reducing the negative impacts of a business and promoting the positive ones. The report you generate is used by stakeholders to make decisions about your company. If you are making positive impacts, such as helping with conservation and advancing course for social justice, clients will want to be part of your brand, buying more and promoting it all the time.
Although the benefits that come with ESG sustainability are many, it is not without some challenges. So, how do you overcome these challenges to enjoy the multiple benefits of ESG reporting? Here are some of the challenges and specific strategies that you might want to apply.
Thoughts of ESG Reporting as a Cost that can Be Foregone
This challenge is very common, especially for firms that are getting started with ESG reporting. The issue is that the efforts you take, whether buying new machinery or recycling, come at a cost, but thinking of it as a simple issue that can be foregone is likely to halt ESG efforts even before starting. To address this challenge, it will be a good idea to look at the bigger picture when implementing ESG. This will help you appreciate the actual value of ESG reporting. Here are some of the benefits that make costs associated with ESG reporting a worthy cause:
- ESG reporting increases your understanding of risks and opportunities that face your business.
- It is an excellent way to improve the long-term planning and management of your enterprise.
- You are able to build better relationships with stakeholders.
- Helps to eliminate the risk of environmental and governance failures.
High Cost of Equipment to Promote Efficiency
For an existing company, thoughts of enhancing the efficiency of production, cutting down wastes, or reducing emissions, often point to one thing–the need for new equipment. Well, this can be challenging, especially when you are focused on cutting down costs. So, is there a way of cutting down the cost? Here are some tips for you:
- Consider setting your goals for sustainability in phases to make the efforts more realistic. For example, you might want to start by recycling water in the first year and then changing the machinery in subsequent years.
- Start by focusing on high-impact activities that do not require a lot of costs. For example, you might want to partner with NGOs working on rainforest restoration and gradually change the machines for higher efficiency in a period of 2-3 years.
Other Enterprises that are Yet to Adopt ESG Reporting
As we have mentioned, implementing ESG reporting comes with some costs. Therefore, the thoughts of other firms that are yet to adopt the process often make some managers contemplate abandoning it. However, this is not the way to go. Think of the long-term benefits that come with using ESG reporting. Instead of halting ESG reporting, try to explore ways of how to use the report to your advantage. For example, you can emphasize the sustainability efforts to the targeted clients, community, and shareholders to win a larger following, grow sales, and increase profits. In the long term, you will be way ahead and those yet to adopt ESG reporting will have to play catch-up.
Implementing ESG reporting can be really challenging, and you need to be more focused, especially on the targeted benefits. To make the process simpler and efficient, consider adopting appropriate sustainability management software .One option that might work well for your organization is Diginex.