It’s important to state that sustainable practices aren’t just for large corporations. We are a SME, with SME customers and we are no less committed to prioritising and promoting sustainability in all we do.
The ESG (Environmental, Social, and Governance) movement can be a complex and overwhelming area to navigate, so here is a curated list of what we think are the 15 pivotal ESG metrics we think most relevant to the journey right now:
1. Employee Diversity
Diversity, a cornerstone of ESG, extends beyond gender and includes ethnic and other factors. Research consistently underscores the correlation between diversity and a company's performance, making this metric crucial.
2. Employee Turnover
Employee turnover serves as an indicator of workplace satisfaction and engagement. Comparing a company's turnover rate to industry averages offers insights into its employee-centric practices.
3. Accident Rates
Workplace safety is paramount. Tracking accident rates and assessing how a company manages safety measures, especially in comparison to industry standards, can reveal its commitment to accident mitigation.
4. Employee Training & Development
Companies that invest in their employees through training and development programs demonstrate responsible business practices. Such initiatives not only enhance careers but also contribute to workforce enrichment.
5. Executive Compensation Ratio
A contentious issue today, understanding the ratio of executive compensation to that of entry-level employees’ sheds light on a company's commitment to equitable compensation practices.
6. Supply Chain Sustainability
Supply chain management's impact varies by company size but remains crucial. Continuously monitoring this metric provides insights into a company's commitment to sustainable supply chain practices.
7. Product Safety & Quality
Evaluating product and service safety and quality, in line with industry regulations, is a fundamental aspect of ESG assessment.
8. Data Privacy & Security
Assessing a company's history of data breaches and its cybersecurity measures is essential in today's digital age.
9. Board Diversity
Diversity should extend to a company's board of directors, reflecting the broader commitment to inclusivity within the organisation.
10. Community Engagement
Companies, regardless of size, influence communities in various ways. Gauging a company's engagement with its community provides valuable context, albeit in proportion to its scale.
11. Anti-Corruption Efforts
Understanding a company's lobbying activities and its stance on combating corruption are pivotal indicators of ethical governance.
12. Greenhouse Gas Emissions
With worldwide heatwaves and rampant wildfires, monitoring Greenhouse Gas (GHG) emissions has become imperative. This metric now encompasses both direct and indirect emissions from companies, including Scopes 1, 2, and 3 emissions.
13. Energy Consumption
As renewable and sustainable energy gain prominence, assessing a company's energy usage and the proportion derived from renewable sources iscrucial. Tools like the Energy Footprint Tool can help in this analysis.
14. Water Usage
Although not universally applicable, certain industries consume vast amounts of water in their production processes. Understanding a company's water usage, is vital for various reasons.
15. Waste Generation
In contrast to waste diversion and recycling efforts, understanding a company's waste generation is essential. Landfills contribute to carbon emissions and are a growing concern. Evaluating whether companies use waste meaningfully is equally important.
The significance of these metrics obviously varies across industries and each industry will prioritise specific concerns. But these metrics serve as valuable tools to unveil a company's inner workings and its dedication to addressing pertinent issues.