What You Can Do To Improve Your ESG Rating?

by Digital CFO The Digital CFO

It is your ESG Rating that will determine how the targeted investors view your business from outside. And if you aren’t aware of ESG or its importance, then you are missing something that is very important for your business.

It stands for Environmental, Social, And Governance. It shows what your business is doing to save the environment from further degrading; how you treat your employees, and how do you manage your business.

Let’s understand the concept with an example

You own a factory where you manufacture cosmetics. For manufacturing creams and lotions, you buy raw material that includes chemicals. Also, you consume energy to run your machines. If you are concerned about the safety of the environment, you won’t use any material that is harmful to the planet. Similarly, you will use green technology and it will be reflected in your ESG measurement report.

As a factory owner, you have workers that include laborers for running machines and white-collar employees. You should treat all your workers as assets. They should get a friendly environment and they should be allowed proper resting time. And they should have access to all necessary facilities in the factory.

As a business, you should practice transparency in governance. For example, the employees should be able to access their data like working hours, leaves, and benefits. Similarly, the investors should be able to see your liabilities and assets so they can make an opinion on your ESG rating.They want to see how your business is performing before making investments in your business.

Let’s come back to your business

It hardly matters what business you do as your business impacts the planet and society in one way or the other. And it is your responsibility to make your business eco-friendly and good for society. Also, you need to make your governance transparent.

How to improve your ESG performance?

First, you should switch to eco-friendly technology or at least reduce your energy consumption to reduce your carbon footprint. Second, you should make your business, friendly for workers and visitors. Third, you should change your business practices to improve the governance and do well on ESG Measurement.

You need to prepare a detailed report showing your ESG performance. The good thing is that you can download a format to show the world how your business is doing in the environmental, social, and governance sectors. And the report should be made public for investors.

Please feel free to reach out to me at jeffrey@persofi.com Call us at: +44 7308 129916 and +972 54 6668182

Website: https://www.persofi.com