The key ESG trends SMEs need to be aware of in 2024
At Elephants Child our mission is to help all our business clients to thrive; we do this by putting purposeful and sustainable growth at the heart of your business strategy, drawing on the key ESG trends that we see in today’s business environment.
More public reporting and fast rising baseline
The minimum baseline for public reporting is rising fast and the requirements are increasing. Although this is particularly being applied to larger businesses, it is affecting SMEs who are part of their supply chain. The regulatory direction of travel around public reporting both in the UK and across Europe, is likely to be increased disclosure regardless of the size of the business. We expect to see additional demands and requirements through regulation and not just environmental impacts – this may include other aspects across the broad ESG spectrum, such as social/community impact and transparency of key governance policies.
If you aren’t already experiencing increased requests for information through RFPs or RFQs when looking at new business pitches or going through due diligence, you soon will.
Understanding how ESG factors can affect your business and the risks and opportunities they present is important; spend time thinking about these issues through an ESG audit and use the results to plan for action within your business. It will certainly help you respond to any questions and requests for information or data and indeed prepare for any forthcoming regulation and disclosure requirements in this space.
ESG in people management, recruitment and retention
How are you thinking about your ongoing recruitment, people management and development strategies, to attract and retain the very best talent for your business? And to what extent do ESG considerations play a part in that?
Spend time understanding where you are as a business when it comes to ESG and thinking about some of those opportunities to develop, grow and empower your teams. Involve them both as an approach to future growth opportunities, but also to manage potential risks in your business as well.
ESG efficiency and the bottom line
Embracing the full breadth of ESG issues can have real, immediate bottom line impacts, including when applied to energy and energy efficiency. We’re all aware of the increase in energy costs over the last few years and the associated environmental challenges. Businesses are seeing the value of understanding the impact of their energy footprint, emissions and opportunities for driving further efficiencies on the future success of their business and profitability. This can include the development of a Net Zero strategy and/or Carbon Reduction Plan for your business, aligned with the commitments made by the UK Government to achieve a Net Zero economy by 2050.
Ask yourself, do you have a clear sense of where you are today on that journey? Do you know what your plans are for further development and enhancement to your energy efficiency within your operations of your business?
Growing emphasis on delivery
Businesses are moving away from setting very long-term stretching targets which we all would recognise are important when it comes to concepts such as net zero and carbon emissions. Instead we recommend a focus on taking some form of action sooner rather than later. Avoid that temptation to plan and refine plans and rather, focus on how you are going to make changes tomorrow, next week, and in the months ahead.
Be open, honest, authentic and recognise the journey that you’re going on and approach ESG considerations in the context of a culture of continuous improvement within your business.
Making ESG a part of your story
When working with business owners on ESG plans, we often find that there is already plenty of positive activity happening and future plans under discussion. However, the activity is often not well co-ordinated and businesses are not using their ESG activities to communicate their purpose, values and culture to their key stakeholders (externally and internally). Businesses who are confident and authentic in recognising that they are not perfect but are nevertheless committed to a journey of continuous improvement within their ESG strategy, sharing regular updates with their stakeholders, benefit from a virtuous cycle of engagement that generates further growth opportunities and helps to maintain resilient, sustainable growth long into the future. Ask yourself whether you are clear on how ESG considerations align with your purpose and values, and how effectively you are communicating your ESG strategy as part of your story.
Take action today!
Kickstart your ESG journey by downloading these ten key questions to understand where your business is now and how to plan for success.
If you would like to watch a recording of our recent ESG webinar with case studies from other SMEs and tips for success in 2024 or would like to know more about our ESG Audit service please get in touch.