5 Ways ESG Reports Create Value For Businesses

How do ESG reports create value for businesses?

1. They continue the global push toward a better future.
2. They improve businesses’ transparency and information disclosure.
3. They represent businesses’ move of giving back to the community.
4. They boost customer trust and loyalty to the brand.
5. They improve businesses’ long-term investment standing.

ESG reports are ways for businesses to disclose their performance across various Environmental, Social, and Governance issues. With the world turning an increasingly critical eye on the sustainability efforts of organizations, ESG reports allow companies to showcase what they have been doing and the progress they have made for the overall benefit of society at large.

There are a number of reasons ESG reports are necessary, beginning with the fact that they are mandated by a number of governing bodies. But there are also many ways that ESG reports create value.

Among others, here are some of the benefits ESG reports can provide for businesses:

They continue the global push toward a better future.

More than anything else, ESG reports are indicators of businesses’ moves toward worldwide development. With the rise of climate change, social inequality, and other major global issues, there is a monumental and ever-growing need for change in the world. Businesses represent a big part of this change because of their huge impact on the three ESG sectors, as well as the equally significant leaps they can take toward positive change.

ESG reports clearly state a business’ efforts toward goals, or lack thereof. They allow readers to hold the business accountable for its actions, inform stakeholders of the business projects, and push for environmental, social, and governance change.

They improve businesses’ transparency and information disclosure.

As we mentioned in the section above, ESG reports are made public to the business stakeholders. That includes investors, customers, employees, and supply chain partners. Transparency is good for building a business’s reputation as an honest, trustworthy entity. At the same time, it provides valuable information for governing bodies and global sustainability organizations to assess and foresee potential developments on a society-, nation- or worldwide scale.

They represent businesses’ move of giving back to the community.

Besides making the business’ ESG efforts visible to all, creating and publishing these reports creates a culture of caring for environmental and social welfare that can spread quickly throughout the company and beyond. It sets an example for employees, customers, and stakeholders to make conscious and actionable efforts rather than just saying so. Now more than ever, we need the change to be universal, so every action counts.

They boost customer trust and loyalty to the brand.

Because ESG reports are open to the public, businesses can make their efforts known to many, including their customers. This is good because customers nowadays pay attention to these kinds of efforts since they too see the need for them. Ethical practices, love for the environment and care for less fortunate communities all earn “plus points” in a customer’s eyes, and maintaining these efforts shows the customer that their patronage goes beyond purchasing a product or service.

Customers who see that the company they are patronizing is a leader in ESG might be more loyal because they feel that their patronage allows the company to do even better, or they may do it to show their appreciation for businesses that care for others. Sticking with the company becomes a win-win situation for all parties because the company profits while the patrons are comforted by the idea that they are contributing to or encouraging a better world.

They improve businesses’ long-term investment standing.

The effects of ESG efforts tend to show after some time, rather than immediately. This is something that investors know, and they look forward to being with the company when the effects happen. So an ESG report is perfect for showing past efforts that are taking effect in the current time as well as current efforts which will come to fruition in the future. Investors are more likely to choose businesses with strong ESG reports because of this.

Key Takeaway

There are a number of ways ESG reports create value, and we’ve outlined some of them in this article. We hope these benefits convince a greater number of businesses to make actionable efforts in the environmental, social, and governance spheres, not just for their own benefit, but for the world at large as well.

At Aboitiz, we make our efforts clear to all, as we acknowledge the work our forefathers have done and strive to follow in their footsteps. Our sustainability, community building, and governance programs and efforts are outlined in our ESG report. We encourage you to give it a look, and we look forward to a better world for us all.