Why Mid-Market Businesses Must Embrace ESG

Why Mid-Market Businesses Must Embrace ESG

ESG stands for Environmental, Social, and Governance in the investment talk circle. And this implies that businesses should focus on ESG to improve funding. But what about the small enterprises? In today’s article, we will learn about why mid-market businesses must embrace ESG. 

ESG – A Brief Introduction

It was the year 2004. And UN Global Compact contributed a study. Its title was “Who Cares Wins: Connecting Financial Markets to a Changing World.” The term ESG was coined in that report. 

As the major financial institutions showed their support for ESG, it became popular. Now, companies that integrate ESG criteria are growing fast. So, you must not ignore ESG in your plans.  

1 | Need for ESG Funding as Your Business Grows 

Every company has a life cycle. So, your business might be small right now. But eventually, it will grow and need more people, more equipment, and more capital. 

Thus, a private enterprise must focus on improving its financial power. Since ESG has become important for investors, do not miss out on the ESG funds. 

2 | ESG Compliance Helps You Attract Investors 

Millennials are your future investors. And multiple studies indicate that the youth prefer ESG-compliant brands. The Zacks Equity Research went on the record saying that 90 percent of millennial investors use ESG criteria. (This figure was about US and Canada.) 

3 | Customers Care About ESG-friendly Brands 

With the increase in literacy and connectivity, more people know about ESG. And this is reflected in their purchase history. Many research firms have studied this phenomenon. For example, PwC US found that 83% of consumers want businesses to develop the best ESG practices. In their “Beyond Compliance” report, 76% of consumers said that they would quit a brand for poor ESG integration. 

4 | Corporate Employees and Workers Want ESG 

Yes, workers across all paygrades believe that their employer should contribute to ESG projects. In the same report by PwC, 86% of employees stated this concept. They wish to work for a business entity that actively supports a good standard of ESG. 

5 | ESG Integration is Healthy for All Stakeholders 

Environmental well-being is important for the health and productivity of your employees. Also, social harmony ensures a favorable market for your growth. Finally, better governance helps the company reduce its risk exposure. 

Hence, a business benefits in the long term when it adopts ESG criteria.  

6 | Your Competitors are Already Pursuing ESG Goals 

Perhaps your corporate rivals are quiet about their ESG performance for now. But they might have started complying with ESG. As most companies are aware of it, not moving fast enough can be detrimental to your brand. So, start revising your operations for ESG criteria as soon as feasible. 

7 | Bigger Corporations Become ESG Compliant at a Slower Rate 

ESG investment is here to stay. But bigger companies have a humongous scope and scale. With thousands of branch offices comes the responsibility of managing them well. 

Also, big brands started in the era when ESG was not a priority. So, numerous outdated operations are present in their ecosystem. 

However, medium enterprises can transform their operations faster.  

Thus, position your brand as an eco-friendly, socially responsible, and efficiently regulated entity. Thereafter, pooling the ESG funding will be easier. Besides, you can always get a professional ESG consultation to reduce the learning overheads. 

Conclusion 

Even if you compete in the entry-level segments, the brand deserves to grow faster. For this purpose, every decision-maker must identify new funding sources. 

ESG-compliant companies will gain the support of their customers, employees, and investors. Also, the long-term benefits for every stakeholder would be meaningful. 

Thus, to help humanity reduce the destruction of planet Earth and societal well-being, businesses must work in coordination. But how can you become ESG-compliant? 

We at SG Analytics have all the answers to your questions about ESG compliance. Contact us without delays to become an ESG-compliant enterprise. 

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