Understanding ESG risks and opportunities for company reputation

CRS Trends  »  Sustainable reputation   »   Understanding ESG risks and opportunities for company reputation

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Trying to separate ESG from organizations today is a risky endeavor, and one we do not advise; instead, it is worth assessing the many opportunities this three-factor business trend can bring for company reputation.

Understanding ESG risks and opportunities is a compulsory assignment for any organization today, as there is no responsible nor ethical way to operate a business outside strong social, governance and environmental standards. 

Furthermore, a carefully crafted and designed ESG reporting assessment can be a key player for company reputation, as it helps understand and manage primary risks and capitalize all potential opportunities. 

Let’s take a look at how and why understanding ESG risks and opportunities is crucial for building a sustainable and responsible reputation.

ESG risks and opportunities

The role of ESG in company reputation

There are many ways to look at ESG and how it may affect company reputation, but the one thing all these views have in common is that it is almost impossible not to think about sustainability, or the lack of it, when discussing reputation. 

Some may look at this idea as a hard pill to swallow, while others know the opportunities of ESG or sustainability assessments and reporting can in fact become a crucial competitive advantage full of business opportunities. 

The link between ESG and company reputation is increasingly obvious, as more and more investors consider these three factors crucial for safe investments, employees look for purposeful and responsible companies to work for, and consumers are willing to spend more in sustainable brands. 

Engage employees in the sustainability strategy
Learn more about how we can help your company achieve ESG goals faster

ESG risks and opportunities for company reputation

As we mentioned above, there are several ways to look into this close relationship ESG matters have upon company reputation. And while both internally and externally the consequences of a lack of sustainable credibility is costly, the benefits can greatly outnumber the initial monetary and time resources ESG assessments require. 

Let’s take a look at how some of these ESG risks and opportunities can manifest in organizations’ reputational value. 

Employee and customer (dis)trust

Employees, consumers and potential candidates are increasingly weary of a company’s ESG performance, and it is not solely a matter of emissions or planetary matters, in fact, these stakeholders are very aware of what a sustainable and responsible business looks like and what it can offer not only society but them as individuals. 

A company that lacks strong ESG policies and initiatives is at great risks of loosing costumers and talent. But announcing policies and initiatives is not enough if the latter do not align with the current situation of the company, that is why ESG data is crucial to establish a strategic sustainable action plan. 

resilience thinking

Investor (dis)trust

As you can probably already tell, ESG and corporate sustainability is all about trust, and in business terms, trust is crucial factor for success. So it is no surprise that investors are keen on such an attribute.

In fact, a majority of investors look for ESG metrics as regulations increasingly push forward sustainable and responsible investments. This trend is likely to continue and grow fast, which makes it a key opportunity for companies to invest and report on ESG metrics for a better investor evaluation. 

Guide to the EU's current and upcoming laws, rules and regulations
Read all about the current and upcoming EU regulatory framework for companies regarding sustainability

Engage employees in your ESG strategy

Employees are key players in making sustainability integrated in company culture, and therefore in every corporate activity and initiative, but how can companies engage their workforce within the ESG strategy? 

In DoGood, we aim to simplify the complex web of sustainability objectives for companies by offering a platform that translates the high-level ESG (Environmental, Social, Governance) objectives into actionable tasks for every single employee. 

Then, each employee not only knows how to make an impact but also feels empowered to contribute meaningfully to the greater sustainable strategy. 

No more vague directives. No confusion. DoGood automates the process, making it seamless for the workforce to know precisely what steps to take.