Synopsis: The business case for the adoption of ESG (environment, social, governance) in the race to attract and retain top talent while London is forecast to greatly increase headcount. Three letters can make the difference in a fierce market. Humperdinck Jackman discusses the contribution of ESG.
Published in the London Chamber of Commerce magazine London Business Matters November 2024
“a company that increases its ESG score by 10 points experiences an increase of approximately 1.8x in its EV/EBITDA multiple”
Talent acquisition and retention is a hot topic for London’s business community as forecasts1 indicate they will “increase greatly” their headcount at a rate greatly exceeding the rest of the UK.
It’s not easy. Employers are finding themselves being interviewed by the best talent, while current staff are evaluating whether the company matches their values. The impact is felt across the board, and – be warned – were not just talking about GenZ here: mature workers are evaluating the same criteria.
Introducing a foundation of ESG to your business can make the difference, while delivering commercial benefits too. ESG – Environment, Social, Governance – is the modern approach to corporate social responsibility, or CSR. Gone are the vague claims and exaggerations of old, replaced with robust global frameworks supported by third-party certifications in the form of ESG ratings.
ESG frameworks provide a structured approach for businesses to demonstrate their commitment to sustainability, social responsibility, and ethical governance. By embedding these principles into the company culture, organisations can resonate more deeply with current and prospective employees alike.
Is yours a firm which visibly practices what it preaches? ESG initiatives, such as community engagement programmes, sustainability efforts, and fair governance practices, help create a sense of pride and purpose among staff. Such initiatives not only boost morale but foster loyalty, reducing turnover, and enable the retention of top talent for longer periods. After all, nobody left a business they loved.
First steps
Environment: Even a London-based business can contribute meaningfully to the environment. Whether you opt for sponsoring a beehive, support a forestry project, or just make it easier for everyone to reduce their waste at home and in the office, such actions are quantifiable and enhance your reputation.
Social: Start with your policies and fill in the inevitable gaps. A programme which incentivises employees to contribute time and expertise to a community project or charity, with some hours each year paid for by the employers, demonstrates concern for the community while creating a stream of positive marketing content. The possibilities are truly unlimited.
Governance: Think of this a leadership. A well-run enterprise has its own house in order, and it begins with prioritising and protecting your primary asset – your employees. There are innumerable benefits which cost truly tiny amounts, and some are even free, such as a tax advisory to ensure everyone has the correct PAYE code.
Good leadership includes demonstrating honesty and integrity, and when led by ESG fundamentals, you should evaluate business risk. This can be as simple as querying the veracity of any “green” claims or going that extra step in compiling your carbon emissions so your customers can also choose wisely.
Positive outcomes
You’re watching the bottom line and challenged to grow your business. As Deloitte say, “a company that increases its ESG score by 10 points experiences an increase of approximately 1.8x in its EV/EBITDA multiple2”, and this growth is directly attributable to your employees.
Use ESG to prioritise your people! They’re your top strategic asset, and by doing so your business will be more attractive to investors and secure lower costs of borrowing. You will be “attracting the top talent through greater social credibility3” and, as Richard Branson says, “If you look after your staff, they’ll look after your customers. It’s that simple.”
Measuring ESG
You’ll want your ESG progress certified, and there are several established third party ratings available. B Corp™ is well suited to smaller businesses, EcoVadis™ is a popular approach for complex supply chains, and the most widespread (from apexanalytix™) covers the entire spectrum. Each have individual strengths, and you could soon be enticing the cream of the crop – and isn’t that the goal?
ESG Pro: Your Partner in Comprehensive ESG Excellence
At ESG Pro, we empower organisations to thrive in sustainability, compliance, and social responsibility. With a commitment to driving meaningful change, we offer tailored services across all dimensions of Environmental, Social, and Governance (ESG) criteria, including:
- B Corp Certification: Full guidance to help you achieve and maintain B Corp status, showcasing your dedication to balancing profit with purpose.
- EcoVadis Support: Strengthen your sustainability ratings and secure a competitive edge with expert assistance on EcoVadis assessments.
- NHS Evergreen Compliance: Navigate NHS Evergreen requirements seamlessly with our specialist services, ensuring alignment with public sector sustainability standards.
- Supply Chain Auditing: Build transparency and trust with thorough supply chain assessments, identifying risks and optimising practices across your networks.
- GHG Reporting: Comprehensive Greenhouse Gas (GHG) reporting, from Scopes 1, 2, and 3, helping you measure, manage, and minimise emissions.
Choose ESG Pro as your trusted partner in shaping a resilient and responsible future for your business. Book a meeting with us to explore how we can support your ESG journey.
