ESG And Product Compliance Inseparable
By Glenn Di-Mauro Hayes
ESG is a term that has been mentioned in industry circles far more frequently in recent years. ESG stands for Environment, Social and Governance. It represents the three main areas of the overall ESG regulatory framework. The objective of ESG is to determine all of the non-financial risks and potential opportunities inherent in the day-to-day activities of an organisation.
ENVIRONMENT
Environmental factors appraise the impact of a company’s actions when assessing not only its own activities but the entire life cycle of products it manufactures or operations relating to the product. In Australia, we are experiencing a rapid upturn in extreme flooding, searing temperatures, devastating fire seasons and droughts that result in considerable economic and reputational damage. An organisation’s ability to adjust and pivot accordingly when faced with these changing factors can determine their imminent commercial viability.
SOCIAL FACTORS
Social factors analyze how a company manages stakeholder relationships, especially the well-being of those both inside and outside of the organization. Recent media reports have spotlighted cases of abuse, sexual harassment and racial discrimination that resonate through the community. And legislation for modern slavery along with human rights due diligence reporting is expected to further impact organisations with global supply chains and dealings with international partners.
GOVERNANCE ISSUES
Governance factors relate to how a company governs itself. For example, how is the overall business operated, and how do they treat their employees and the environment? Stakeholders are urging companies to integrate ESG goals into their business practices and have measurable indicators regarding their strategies and reporting processes. This extends to other businesses linked to the organization and their approach and practices relating to ESG.
STRATEGY FOR SUCCESS
ESG performance is starting to become embedded into the mindset and strategic planning of all forward-thinking businesses. Increasingly, investors are aligning their portfolios with those companies that actively address the ESG risk through a high standard benchmark. A suitable ESG framework enables investors to determine how well a company executes their overall strategy compared to its rivals.
The benefits of being prepared and proactive include identifying patterns and trends around company interactions, improving financial performance, building customer loyalty, gaining a competitive advantage over the opposition and attracting investors to the organization.
INTERTWINED
It’s important to acknowledge that compliance and product safety are intertwined within each ESG factor. BWES specialises in comprehensive compliance and safety services for a wide range of products and categories, ensuring that businesses effectively navigate the ESG space.
If you have any questions or need assistance with ESG-related matters or compliance, feel free to reach out to BWES. We are dedicated to supporting your business’s sustainable growth and success.
This communication (including any attachment) has been prepared by BWES and is based on the available information at the time of publication and is believed to be true and accurate. The information contained in this communication should be used as a guide only and may cease to apply if applicable regulation or the product’s design or application is altered. BWES does not take responsibility for any Injury, Loss for damage suffered by any party’s interpretation or decisions made by any party on the information provided in this communication.