Why Businesses May Want to Consider ESG in Strategic Planning
When engaging in strategic planning, business owners and their leadership teams must consider various factors. These commonly include the state of your industry, the national and local economies, the company’s financial position and cash flow, and opportunities in the marketplace.
However, in today’s world, where transparency is everything, another factor that may be important for some companies is a clearly defined approach to environmental, social and governance (ESG) issues.
3 areas of focus
As a general concept, ESG (as it’s often called for short) focuses on three areas:
- The environmental component considers your company’s impact on the environment, including the energy it uses, the waste it produces and the resources it consumes.
- The social element examines your business’s relationships with people, communities and institutions. It includes fair labor practices; worker health and safety; diversity, equity and inclusion; and your company’s impact on the people of the community or communities where it operates.
- The governance portion includes policies, practices and procedures your business adopts to govern itself. Considerations include ethics, transparency, legal compliance, executive compensation, supply-chain management, data protection, and product quality and safety.
The idea is that, to be a good “corporate citizen,” it’s important to recognize the impact of […]
