Corporate sustainability refers to a management model that differs from the "traditional" as it is driven not only from the economic dimension but puts sustainability at the forefront. Corporate sustainability seeks to produce long-term stakeholder value by implementing a company plan that emphasizes the ethical, social, environmental, cultural, and economic aspects of conducting business.
ESG reporting is becoming increasingly important for companies considering the growing focus on sustainability involving all stakeholders, from regulators, to businesses, to financial institutions and consumers.
Sustainable procurement entails a systematic approach to purchasing, wherein an organization's acquisition of goods and services is undertaken in a manner that generates positive outcomes for both the organization and society at large, while simultaneously minimizing environmental impacts. This is achieved by ensuring that suppliers' employees are provided with decent working conditions, products and services acquired are sustainable, and socio-economic concerns, such as inequality and poverty, are effectively addressed. In this article, we will explore the environmental and economic aspects of sustainable procurement.
ESG factors have become crucial in attracting investors, retaining customers and maintaining a positive reputation. In this article, we will explore the importance of ESG performance and discuss why it's essential for your business to prioritize it.
ESG (Environmental, Social, and Governance) ratings have become a critical measure of a company's sustainability and ethical practices. An ESG rating measures a company’s exposure to long-term ESG risks, providing investors, stakeholders, and consumers with a way to evaluate a company's performance based on ESG criteria. With the thriving of ESG ratings such as Bloomberg, it has become imperative for companies to measure their impacts and ESG performances through the most effective KPIs choices.
To remain competitive in increasingly volatile markets, a company must be able to evolve over time, responding to consumer and workforce needs and offering products and services in line with market paradigms.
The increasing attention given to sustainability issues by regulators, investors, consumers, and many other stakeholders has transformed a company’s ESG performance into a strategic lever for its competitiveness. The benefits of measuring and improving one's ESG performance encompass many aspects: from increased financial stability, to improved brand reputation, to access funding opportunities and projects reserved only for companies that show good ESG performance. Benefits that are as relevant to large companies as they are to SMEs. Despite this, when it comes to ESG performance, companies still encounter several problems concerning metrics and governance.
When it comes to sustainable transition, one of the first areas that companies need to analyse is their business model. Indeed, the sustainability of the business model is the foundation on which not only the success of the organization's sustainability strategies depends, but also its competitiveness and, before that, its very viability over time. In reference to the business model, in fact, sustainability indicates not only the impact of the company and its operations - and those that occur upstream and downstream its supply chain - on the environment or communities where the company is located, but also the economic sustainability of the model over time. This analysis, as well as the work to streamline and improve the critical issues detected, must consider all aspects that impact the company's business model, as well as all areas impacted by the company. In this journey, ESG plays a primary role, as it helps companies to identify those issues and areas where they need to focus on to monitor current performance and develop strategies for improvement.
There is no sustainability strategy that can avoid considering what happens along a company's supply chain. In fact, we know that about 90% of a company's carbon emissions are generated along the supply chain. Despite this, while the number of companies measuring the direct impacts of their operations is increasing, there are still few that measure the impacts associated with everything that happens along the supply chain. This situation is often generated by an undefined and unstructured approach to measuring ESG performance, including unclear governance and accountability, as well as the failure to monitor relevant KPIs. However, failure to monitor supply chain sustainability often comes from the scale of the project. Large companies, for example, are often characterized by long and complex supply chains, which make assessing suppliers’ ESG performance a huge challenge. That is why when it comes to a sustainable supply chain, it is important to rely on the right partners who can help the company deal with all these complexities.
A sustainable supply chain requires an integrated approach that involves all aspects of the supply chain, from sourcing to delivery. Every large company’s sustainability effort is tied to their ability to partner and support improvements in small and medium-sized enterprises (SMEs) along the entirety of their supply chain. On their side, SMEs can take the lead and embrace specific initiatives to promote sustainability in their supply chain, seizing a unique opportunity to stand out along the value chain.
In recent years, properly measuring and communicating one's ESG performance has become a competitive lever for companies. However, while the adoption of sustainability-related practices is becoming more common among companies, measurement and governance issues still pose major challenges for many organizations, especially SMEs.