How EHS & ESG criteria work together to boost your business

Sustainability starts with successful EHS compliance management. To reap the benefits of meeting ESG criteria, you must begin on the right regulatory foot.

by Diletta Managò

As Environmental, Social, and Governance (ESG)-oriented investments continue to rise, so does the scrutiny over companies’ ability to measure up to increasingly high sustainability standards. While keeping up with ESG criteria can be daunting, there is a relatively simple sine qua non for companies to better surmount the growing pressure. Namely: Efficient environmental, health, and safety (EHS) compliance management.

EHS compliance clears the way to meet ESG criteria

With ESG still largely remaining a vague concept and, at the same time, turning into a must-have for successful companies, EHS steps in to help. And it’s your first step to success.

To make your way through ESG criteria’s complex framework towards sustainability goals, make sure you start from a solid base of regulatory compliance. EHS essentials bring tangibility to the more nebulous trend of ESG. Many of the regulatory areas that your EHS team already manages are crucial to understanding and improving your ESG rating. These key areas include air emissions and waste management, energy and water efficiency, climate change policies, and employee’s health and safety requirements.

By managing regulations in these directly related fields, you’re giving your business the baseline it needs to enable a valuable – and viable – ESG program. Additionally, beyond monitoring and aligning your business with these regulations, your associated EHS records and reporting help give a leg-up to your business’s longevity. Regardless of which of the (many) ESG reporting frameworks your business chooses, EHS serves as a starting point to help stakeholders clearly see where your company stands.

From EHS to ESG criteria to excelling your business performance

Once you’ve efficiently put into place the right EHS resources, you can then set up your company for success in ESG criteria. Contrary to common conception, investing in reducing or limiting your environmental or social impact doesn’t have to mean sacrificing financial returns. Ensuring consistent assessment of your EHS risks (and addressing any issues therein) helps your company do more than be compliant. It also taps into the compensation that comes from better performance. (And we’re not just talking about sustainability-focused investors.)
Organizations who effectively address ESG factors even experience long-term benefits in numerous areas, including:

  1. Preparedness: When your company is conscious of environmental regulatory changes, it can proactively minimize costs associated with non-compliance fines, mitigate environmental risks, increase its energy resilience, as well as stay on top of the latest technologies for reducing waste and emissions.
  2. Productivity: By adopting internal responsive social policies, such as practices safeguarding equality, inclusion, and occupational health, your company shows employees that it recognizes their value. Also, with the workforce community increasingly preferring to work for socially conscious companies, an aligned approach can dramatically increase employees’ morale and engagement, therefore resulting in enhanced productivity.
  3. Flexibility: In an economic system where only those able to adapt thrive, showing that your company has a transparent governance model promotes a trustworthy and agile environment. Crystal-clear management processes keep your company open and adaptable, providing a malleable system that keeps up with the ever-evolving business reality.
  4. Positive reputation: Taking a firm stand on environmental and social issues has a direct – and often substantial – impact on brand image. If you show that your company makes a positive impact on the world (or is actively diminishing a negative one), your business can be rewarded with enhanced public recognition, including from customers, partners, and investors.

To tap into the full business advantages of an ESG program, look at how your company measures up against the ESG reporting framework of your choice. From there go back to the EHS source to see where you can improve from your foundation up. As you work to optimize processes toward a more sustainable end-goal, it’s likely that you’ll see your efforts resulting in long-term benefits to your business along the way.

 

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Counting EHS into ESG criteria for your company’s long-term success

With ESG criteria counting more and more for (or against) companies, investors and the community alike look to them to do more – and to show it. Certainly, the increasing demands to prove your company’s commitment to environmentally friendly operations and socially inclusive policies can be overwhelming. However, with the many benefits your business will enjoy, approach ESG criteria as a profitable opportunity. Ensuring a high level of regulatory compliance is the first step to stepping up the ESG ladder.

EHS teams offer an inestimable asset for companies: insights into sustainable business models that pave the way towards high ESG performance. If you’re an EHS professional, leverage your vantage point to demonstrate how your efforts bring added value beyond regulatory compliance. If you’re working alongside EHS teams, ensure that their perspective is incorporated when developing your company’s sustainability policy. Doing so will provide not just a comprehensive view of how your business is performing on the ESG scale, but how it will excel in the future.

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