ESG is an acronym for Environmental Social Governance. Often people ask the difference between ESG and Corporate Social Responsibility (CSR) and sometimes confuse the two, so we thought we would write a short introductory article on the topic!
CSR helps organisations think about their accountability. ESG builds on this and makes it measurable. Imagine an organisation that wants to implement CSR and ESG policies. CSR can be incorporated by communicating internally and externally that the company is committed to being more sustainable and responsible. ESG requires formal measurable goals, data collection and reporting. An example of ESG might be a commitment to a 20% increase in recycled materials within two years or planting a million trees in 5 years – and then the provision of evidence that this has happened.
ESG provides the framework to monitor, measure and improve on CSR activity, it can be incredibly useful to demonstrate, particularly to socially responsible investors or stakeholders (like students) the action being taken.
ESG also is broader than CSR. It is intended to be an institution wide consistent and clear commitment, embedded into your strategy and involving every aspect of your business. Consideration for example must be given to how you treat your employees, suppliers and stakeholders, how you manage your supply chains and how you will use data to record and report that.
ESG is something we will be looking at more over the coming months, let us know if you have any particular questions you want answered or if you want to share information on what your organisation is doing.