How do you improve your ESG rating?
What does the ESG rating measure?
The ESG rating is the evaluation of an organization's performance with respect to environmental, social and governance issues.
If this is your first time hearing about ESG, or you are still not sure what it means, we recommend that you first read our article on ESG objectives, in which you will find a more generic overview of the topic.
In this content, on the other hand, we want to take a further step forward, explaining to you How to improve your ESG rating. But first let's try to answer another fundamental question: why improve your ESG rating?
The benefits of a high ESG rating
Today, having a high score in terms of ESG not only offers several advantages to companies, but it can even make a difference in terms of market positioning, allowing them to differentiate themselves from competitors.
Here are some advantages associated with a high ESG score:
- attract and hold investments more easily, since ESG issues have become a reference for understanding which company to direct funding to;
- achieve better financial performance, thanks to the efficiency of company costs;
- reduce legal and regulatory risks, also avoiding heavy penalties due to government restrictions regarding the environmental impact of companies;
- meet the expectations of consumers and staff, who give increasing importance to environmental and social issues.
The 3 steps to improve your ESG rating
1. Understanding your company's impact on climate change
The first step is definitely to understand how much your company actually impacts the environment. How do you do it? With the Calculation of emissions, starting from the direct ones, that is, linked to business activities, and then from the indirect ones, deriving from the energy purchased and consumed.
Subsequently, it will be possible to calculate the emissions related to activities not directly controlled by the company, such as those of suppliers and customers: the so-called Purpose 3 emissions.
2. Mitigate environmental impact
Now that you know how many emissions your company produces, it is necessary to understand what you can do to reduce this impact, by designing a emission reduction strategy based on your business activities, in order to make the work environment more efficient.
However, it is necessary to make a clarification: implementing actions and measures to reduce your emissions, such as the switch to renewable energy sources, may take some time and, above all, it will not allow you to reach Reset your impact.
For this reason, it is essential offset non-reducible emissions by supporting certified environmental projects, in order to balance its impact on the environment, while continuing to reduce it as much as possible.
3. Promote sustainable practices
An effective way to reduce the impact of business activities is to promote sustainable practices within the company: for example, you can train and sensitize staff on environmental sustainability, or promote sustainable actions such as separate waste collection.
Or, again, you could consider promoting it Smart working or hybrid work: think that working from home for Half of the week It even decreases by 24% the emissions produced.
In short, analyze, plan and improve are the actions behind all initiatives for a good ESG assessment. But that's not all: in this article we've seen where to start to improve your score, but there are other sustainability moves you can take to obtain a highest ESG rating.
The team of Up2You Insights created an infographic with The 5 sustainability moves to improve the ESG rating, where you will find other insights, data and graphs, which will help you improve your score a lot.
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