You can’t buy ESG by the metre

Everybody’s talking about ESG. But what is it?

It is a way of assessing how activities of a company affect their stakeholders:

Environmental

• How is the company affecting the physical world around them?

Social

• Customer satisfaction
• Employee engagement
• Human rights
• Data security
• Labour standards
• Community engagement

Governance

• How rigorously is the company managed?
• Ethics
• Policies
• Whistleblowers

It was born from a UN study in 2005 “Who Cares Wins” where they called for all players in capital markets to build in Environmental, Social and Governance concerns into everything they do. Whether or not you or I agree that these are the most important things to concentrate on, the fact is that now nearly 20 years later, it has gained momentum and customers and investors are now assessing companies based on their ESG activities.

Unfortunately, that means many will have “token” policies in order to show they are doing something. But you can’t buy ESG by the metre. Markets will sniff out the authentic from the pack.

So how can a company have authentic ESG practices? Its starts by fundamentally being “others centric”. Focussing on how be benefit others will ultimately be good for business.

Where does charity fit in?

Supporting charities is just one part of the “S” however it is an easy way to :

a. start shifting your thinking towards the needs of others
b. get good content/stories to enable you to tell others about what you are doing in an impacting way
c. Be authentically helping others

The best way to get started supporting charity is to:

• Consider your corporate values. What is relevant and important to the company?
• Choose a cause or causes that match these values. For example:
  – It’s makes sense for builders or property developers to support social housing or homelessness
  – If you buy products from overseas, give consideration to human slavery
  – If you sell food in Australia, consider feeding the poor in a developing country
  – If you are in farming, consider supporting sustainable farming in the third world.
• Seek out reputable charities doing effective work in this space.
• Determine a budget for support. Be generous. Token gestures won’t impress your stakeholders. Consider the 1% Pledge

If you’d like some help getting started, Payton Foundation has already assessed a number of charities and has a tax deductible structure that you can utilise. We can also arrange for charity partners to come and speak to your employees/clients and provide content for your marketing. We also have a number of volunteering opportunities for you to really build your engagement.