Better ESG efficiency equals big cost savings for your business

Dr Michelle de Jongh

Managing Director ESG, Inspired PLC

Businesses should view ESG strategies and reporting as a benefit rather than a burden, says Dr Michelle de Jongh, Managing Director of ESG consulting services, Inspired PLC.

In your experience, how do businesses view ESG reporting?

We’re past the peak of ESG (environmental, social and governance) reporting hype. Companies required to do it accept that it’s part of the business landscape now. We show our clients the positives of ESG reporting by making it practical and useful, highlighting the operational improvements it brings. It’s about seeing it as a benefit, rather than a burden.

If a company uses its resources in the most efficient way, the byproduct is always a positive for the business — and the environment. There’s ‘no one size fits all’ way to do this because each business and each sector is different.

Are there ‘best practice’ strategies you’d recommend?

Start with the basics. If a business makes its building more energy efficient, it cuts costs, and the money it saves can be reinvested. Solutions that drive energy efficiencies include everything from building management systems and sensors to LED lighting and on-site energy generation. Manufacturers can also look at the efficiency of their machinery and whether they could transition to lower emissions alternatives. Then, it’s about finding efficiencies in the supply chain. How does a company engage with its suppliers, what products enter its supply chain — and what does that mean for the business?

It’s about seeing it as a
benefit, rather than a burden.

What challenges do businesses face in reporting and implementation?

Implementing an ESG strategy and reporting on it can involve a significant human capital cost, which can be a real challenge for SMEs, particularly ones that just meet reporting thresholds. Suddenly, they need people who understand climate change, pollution, biodiversity, the circular economy, complexities of supply chains, standards of international law, governance, etc.

What should companies do to fund solutions and build out in-house expertise?

They should understand their spending priorities over the next five years — then, crucially, ring-fence their budget accordingly. The key driver for doing this is the UK’s 2030 carbon emissions target. As we near it, more businesses are going to be under pressure to decarbonise operations with solutions that will only become more expensive. Ring-fencing budgets will serve a business far better in the long term.