FAQs - ESG and Sustainability
Here are the simple steps that you can use to measure environment (E), social (S), and governance (G):
- Identify material issues through a thorough assessment of the industry, sector, and geographical location
- Gather data from reliable sources, including internal and external sources
- Analyse the data to ensure accuracy and consistency
- Incorporate the analysed data into an ESG report that provides a comprehensive overview of sustainability performance
- Develop strategies for improvement based on the insights gained from the data analysis, such as setting targets, establishing action plans, and monitoring progress towards sustainability goals
- Communicate sustainability achievements to stakeholders in a credible and transparent manner
To begin with, organisations must grasp their inherent business essence, exemplified by the Saas framework for financial institutions and the GRI (Global Reporting Initiative) framework for manufacturers. Additionally, cognisance of prevailing regulations in operational and geographic areas is essential. Moreover, understanding the interests and expectations of stakeholders, including those who will pursue the ESG report, is pivotal.
ESG reporting is the most simple and essential tool for communicating ESG performance, providing a comprehensive overview of a company’s sustainability impact, goals, and progress. Companies should choose a reporting framework that best suits their needs, such as GRI or SASB, and disclose their ESG information in a clear and accessible manner. Stakeholders value transparency and accountability, so companies should be open about their challenges and successes and respond to feedback from stakeholders. Effective ESG communication helps build trust and credibility, supporting long-term sustainable growth.
Whether to utilise software depends on the organisation’s available resources and current requirements. Software can offer advantages such as real-time data tracking and automation of the data collection process, thereby enhancing efficiency. However, companies embarking on their initial ESG endeavours opt for a straightforward and economical solution, such as Microsoft Excel, rather than investing in specialised software right from the start.
Implementing ESG practices can yield significant cost savings and bolster Return on Investment (ROI) over the long term. Secondly, embracing ESG principles can be an effective strategy for attracting highly skilled and qualified young talent. Thirdly, ESG promotes exemplary governance practices, which can enhance and safeguard a company’s reputation.
Learn more about how embracing ESG and sustainability with purpose can sustain businesses in long-term.
No, ESG (Environmental, Social, and Governance) is a broader concept encompassing ESH (Environmental, Health, and Safety) as one of its components. While ESG is primarily driven by investor demand, ESH is largely regulation-driven. In essence, ESG serves as a decision-making tool for investors, allowing them to integrate environmental, social, and governance factors into their investment strategies.
Businesses should recognise that profitability involves managing costs and ensuring long-term sustainability, not just generating revenue. Implementing Environmental, Social, and Governance (ESG) initiatives can lead to cost savings, new revenue streams, risk mitigation, and improved brand reputation. The cost of inaction is higher than the cost of taking action, so it’s essential to identify real problems and address financial sustainability before investing in ESG.
Sustainability matters have a significant impact on business operations and vice versa. Companies must address environmental, social, and governance (ESG) sustainability matters, which can pose both risks and opportunities. Examples of ESG sustainability matters include greenhouse gas emissions, energy consumption, waste management, water usage, and supply chain management. Effective management of these sustainability matters can help companies minimise risks, improve operational efficiency, and enhance their reputation among stakeholders.
For companies listed on Bursa Exchange or other stock exchanges, there are certain listing requirements that must be met regarding environmental, social, and governance (ESG) factors. However, for small and medium-sized enterprises (SMEs), there are fewer ESG reporting requirements from banks, investors, customers (including large corporations and foreign investors), and export countries.
CSR (Corporate Social Responsibility) and ESG (Environmental, Social, and Governance) are related concepts but differ. CSR refers to a company’s voluntary efforts to improve its social and environmental impact. CSR only constitutes a small part of the S in ESG. At the same time, ESG is a framework used to evaluate a company’s performance on environmental, social, and governance issues.
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