If you’ve ever been on a wilderness trip, you know there are points when your guide is definitely not your favorite person. Your guide asked you to paddle harder in choppy waters to get to safety in a storm. Push through exhaustion to reach a campsite. But just the same, paddling harder and pushing through left you feeling happy, proud, stronger.

ESG is the guide that’s getting us to a better future with stronger businesses. But the anti-ESG movement is sowing doubt. So grab your coffee or a cocktail and let’s bust some anti-ESG myths, shall we?

1. ESG & Extractive Industries: Preparing for the Future

You might have heard that ESG is out to kill industries like oil and gas. But here’s the deal: ESG isn’t here to kill these industries; it’s here to help them thrive in the renewable energy era. Instead of being a roadblock, ESG is creating the path for them to participate in the opportunities of the future.

Consider the oil and gas companies investing in renewables R&D and building the capabilities to compete and thrive in the renewables economy. They’re not just being environmentally responsible in adopting these ESG practices; they’re securing their spot in the evolving energy landscape. By embracing change, these companies are safeguarding jobs and creating new ones in new sectors.

ESG isn’t the problem for these industries – it’s the solution for their more sustainable and secure future.

2. Not Politics, Just Progress

I’m not much of a conspiracy theorist, so let’s tackle the idea that ESG is secretly plotting to undermine conservative policies and industries. Nope. ESG is simply a way to raise the bar for all businesses when it comes to healing the planet we all live on, uplifting the communities that make up our stakeholders, and managing our businesses well to reduce legal and ethical risks. It’s about doing the right thing, regardless of your political stripes.

ESG doesn’t have a political agenda. It’s simply about good business and a sustainable, secure future. When companies follow ESG standards, they’re showing their commitment to ethical and sustainable practices. It’s not about politics, it’s about building a world where everyone can thrive. It’s our ally in creating a better future, which (I would imagine) is a pretty bipartisan issue, don’t you think?

3. Boosting Fairness & Ethics

Some critics say ESG standards mess with state codes and fair labor practices. Nope. Remember, the G in ESG is for Governance. ESG is inherently pro-fairness and ethical behavior. It encourages companies to treat their employees, customers, and communities with respect. Transparency and accountability reduce risk for businesses and ensure sustained positive outcomes, not just a great next quarter at any cost to the company’s future (which is arguably the anti-ESG approach).

Model legislation is popping up around the country aimed at making ESG-based operations more difficult. It’s critical, though, that all businesses have the freedom to operate in ways that benefit their bottom line and create significant social and environmental value. Of course, that also means businesses should have the freedom to choose the “good next quarter at any cost” approach if they wish. After all, having that choice is a testament to the measured freedom and flexibility American businesses are supposed to enjoy.

But history has shown that businesses prioritizing quick wins over long-term sustainability find themselves facing detrimental challenges sooner rather than later. On the other hand, history has also shown that embracing ESG-based operating models opens doors to increased returns and long-term success. Anti-ESG policies are only convenient for those looking for short-term and personal gains.

4. It’s Not Woke, It’s Just Having Values

Along the same lines as fairness and ethics, ESG is all about diversity, equity, inclusion, fair wages, and safe workplaces. These are values that should make us all smile, not cause political angst. When companies participate in ESG, they’re less likely to run into trouble with labor disputes and ethical blunders. Put simply, they’re being responsible citizens that value people, the planet, and profit in equal measure.

Those first three values–collectively DEI–are triggering for those they scare. But there’s a price to being afraid to uplift others. As a DEI expert put it to me in a recent conversation, when companies implement effective DEI practices, they’re building a bigger funnel for talent, customers, and investors than their competitors who don’t. Not to mention, of course, the moral, ethical, and simply human reasons to implement DEI practices.

The point is this – having values that serve and uplift historically marginalized people isn’t “woke.” It’s just being good to others and uplifting humanity collectively. Which, it turns out, is pretty good for business.

The Hero We Need

The anti-ESG movement has it’s wires crossed. Its roots are in short-term political and financial interests for individuals. ESG’s roots, on the other hand, are in long-term economic, social, and environmental interests of the masses. ESG isn’t the villain, it’s the hero we need. It’s a positive force pushing companies toward sustainability, scaling their benefit to society, the environment, and their own bottom line. It’s that trip guide getting us safely to our next beautiful campsite.

Choosing ESG isn’t just the right thing to do – it’s a smart business move that sets us on a path to a brighter, more sustainable future. So let’s get on board with ESG and work together to make the world a better place for everyone, especially our future generations.

The post ESG: Paving the Way to Better in the Face of Anti-ESG appeared first on New Commodity.

What’s wrong with CSR?

Since the 1970s and ’80s, CSR has been a helpful step in recognizing the value of ethical business practices. But it may be sending companies down the wrong path. CSR’s emphasis on “doing good” has primarily led to companies participating in charity matching and volunteer activities. Then, there is ESG (environmental, social, and governance). ESG’s emphasis on “being good” leads companies to healthier operations that benefit the business and society.

Done right, the difference between CSR and ESG is embedded purpose and positive impact. And increasing the number of impact-driven companies brings far greater value to society and the business than CSR programs alone.

Why ESG?

Put simply, embedded purpose and positive ESG impact means that a business’s success is good for society. It means employment practices, supply chain relationships, environmental impact, and customer care practices are aligned with purpose and values. On the other hand, CSR programs are easy to implement. They make employees and leaders feel good and help local non-profits. So why take on being purpose-driven or impact-driven? Because:

• Consumers and employees are demanding that companies operate ethically and sustainably, and that they prioritize ESG goals
• Soon, laws and regulations will be in favor of ESG standards, not short-term profit
• Purpose-driven and impact-driven businesses are far less likely to face PR and legal crises
• And, they position themselves more clearly and authentically in the market, making customers and employees loyal brand champions

How to move to ESG

New Commodity is on a mission to make sure every business is purpose- and impact-driven. So we want to share a few ways to make it easier and more intentional. Here are four steps for getting started on your ESG and positive impact journey.

1. Articulate

Embedding positive ESG impact starts with clearly stating the company’s purpose in a way that makes sense of its products, services, and activities. So, to get started, consider your company’s values and where the company has the most opportunity for positive impact and ESG standards. Be sure to include a diverse group of stakeholders in this process.

2. Assess

Conduct a materiality assessment to make sure your company’s practices align with its purpose and impact goals. Review practices with a critical eye toward sustainability, diversity, inclusion, and community & stakeholder support.

3. Prioritize

Taking on too much can burn out your people and your resources, leaving the company disheartened by the effort. Instead, prioritize areas where you can have quick wins. At the same time, build an action plan for one or two long-term impact goals. (Be sure to include metrics and resource planning.)

4. Balance

Balance the needs of as many stakeholders as you can. For instance, there are likely impact improvements that would both increase profit margins and reduce your carbon footprint. Or you may find improvements that would reduce operating costs and benefit your supply chain.

Reaping the benefits of ESG

Setting ESG goals and raising its ESG standards increases your company’s value. First, aligning operations to higher ESG standards often results in OPEX savings. While there may be an up-front cost to solutions, many will see a significant ROI. For example, renewable energy results in lower energy bills and tax incentives. Companies with operations well-aligned to higher ESG standards also gain more trust from governments and banking institutions.

Beyond the financial value of ESG standards, there are brand value benefits. In the short-term, transparently raising ESG standards generates interest and excitement in your company. And in the long-run, successfully meeting higher ESG standards creates loyal brand champions among your employees, customers, and suppliers.

But most important of all is the positive impact your business will contribute to society and the planet.

Let’s get started.

The post From “Doing Good” to “Being Good”: Moving Beyond CSR appeared first on New Commodity.