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Reasons Why Businesses Should Be ESG Compliant

ESG (environmental, social and governance) are measures that are put in place to check on the repercussions that organizations have to the world in which they are operating on. While businessmen and women of the yesteryears were only up to maximizing their business returns within the shortest period not caring of their effects to the society and environment that they are operating in, things are now changing. The need for having responsible investors in different sectors has led to the development of ESG criteria to check on the performance and also do the rating of how investors are becoming a social and environmental concern in their investments. Here is an article on why ESG compliance is important to organizations.

ESG awareness makes it easier for organizations to access different sources of capital to finance their operations. While most investors may try to shun away from implementing ESG policies citing that it is expensive, the better part of it is it lowers the costs that companies use to get capital. Lowering the cost of capital is key in expanding and having a steady growth in business because you can get leveraging at a lower cost, unlike those companies which are not ESG compliant.

ESG compliant companies have high chances of attracting investors. Investors are looking for companies which have a good track performance not only in their business activities but also mindful of other factors such as the environment and their social impact as well. Shareholders want to see the leadership of the companies they have invested in being mindful of the interests of the environment, their employees and their customers and outside world as well.

Once your organization invests in being ESG abiding, then the staff become motivated and contribute to increasing the productivity. Employees want to work in a place where they feel valued, an ESG compliant company values their employees, the environment and the outside world in general, this in return makes their employees more encouraged to give their best. You can have a high number of retained employees simply by taking care of them, being mindful of both your existing and potential customers and the environment as a whole.

High ESG ratings will also improve your company’s image in the public. Having a good reputation is key for every business that is looking to thrive in business, one of the best ways that a company can maintain a clean reputation is by taking care of the society and the environment. Improve your company’s brand name by being ESG compliant and increase the earnings of the investors.
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