{"id":16643,"date":"2023-07-05T18:26:03","date_gmt":"2023-07-05T23:26:03","guid":{"rendered":"https:\/\/www.sfw.cpa\/news-and-guides\/?p=16643"},"modified":"2023-07-05T13:26:04","modified_gmt":"2023-07-05T18:26:04","slug":"why-businesses-may-want-to-consider-esg-in-strategic-planning","status":"publish","type":"post","link":"https:\/\/www.sfw.cpa\/news-and-guides\/why-businesses-may-want-to-consider-esg-in-strategic-planning\/","title":{"rendered":"Why businesses may want to consider ESG in strategic\u00a0planning"},"content":{"rendered":"

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When engaging in strategic planning, business owners and their leadership teams must consider various factors. These commonly include the state of your industry, the national and local economies, the company\u2019s financial position and cash flow, and opportunities in the marketplace.<\/p>\n

However, in today\u2019s world, where transparency is everything, another factor that may be important for some companies is a clearly defined approach to environmental, social and governance (ESG)\u00a0issues.<\/p>\n

3 areas of focus<\/strong><\/p>\n

As a general concept, ESG (as it\u2019s often called for short) focuses on three\u00a0areas:<\/p>\n

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The environmental<\/em> component considers your company\u2019s impact on the environment, including the energy it uses, the waste it produces and the resources it consumes.<\/li>\n
The social<\/em> element examines your business\u2019s relationships with people, communities and institutions. It includes fair labor practices; worker health and safety; diversity, equity and inclusion; and your company\u2019s impact on the people of the community or communities where it\u00a0operates.<\/li>\n
The governance<\/em> portion includes policies, practices and procedures your business adopts to govern itself. Considerations include ethics, transparency, legal compliance, executive compensation, supply-chain management, data protection, and product quality and\u00a0safety.<\/li>\n<\/ol>\n
The idea is that, to be a good \u201ccorporate citizen,\u201d it\u2019s important to recognize the impact of your company\u2019s activities on the environment, the people it employs and those it interacts with. And it\u2019s equally important to implement business practices that minimize potentially adverse\u00a0effects.<\/p>\n
Who\u2019s watching<\/strong><\/p>\n
Not everyone agrees on the importance of ESG. However, as mentioned, businesses of certain types or in certain areas may find themselves under pressure from various parties to implement ESG initiatives.<\/p>\n
For starters, some customers are increasingly considering ESG \u2014 particularly environmental impact and fair labor practices \u2014 when making buying decisions. Similarly, certain investors are making ESG performance a priority when deciding whether and how to invest their capital. These stakeholders may be interested in not only how your company handles ESG, but also how your suppliers and other business partners do\u00a0as\u00a0well.<\/p>\n
Moreover, many governing authorities at the global, national, state and local levels are prioritizing ESG. A business could incur costly fines and reputational damage for not complying with laws or regulations related\u00a0to:<\/p>\n
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Environmental issues such as pollution and carbon emissions,<\/li>\n
Social issues such as labor relations, worker health and product safety,\u00a0and<\/li>\n
Supply-chain issues such as human rights violations and the use of conflict\u00a0minerals.<\/li>\n<\/ul>\n
In addition, public entities may impose ESG standards that go beyond the legal requirements on certain projects. This can seriously impact businesses that rely heavily on government contracts.<\/p>\n
Changes in the labor force may also have an impact. Generally, younger workers tend to\u00a0consider a potential employer\u2019s ESG practices when deciding where to work. And employees of all ages are increasingly more attuned to whether a company mindfully handles the many issues involved. In short, ESG may affect hiring and employee retention.<\/p>\n
Something to think about<\/strong><\/p>\n
As you and your leadership team check in on this year\u2019s strategic goals and develop new ones, you may want to assess whether and how ESG might affect your company. It\u2019s something that many businesses are focused on \u2014 and you just might discover some ways\u00a0to differentiate yourself from the competition.<\/p>\n
\u00a9 2023<\/em><\/p>\n
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When engaging in strategic planning, business owners and their leadership teams must consider various factors. These commonly include the state of your industry, the national and local economies, the company\u2019s financial position and cash flow, and opportunities in the marketplace. However, in today\u2019s world, where transparency is everything, another factor that may be important for […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,14,10],"tags":[8,11,12],"class_list":["post-16643","post","type-post","status-publish","format-standard","hentry","category-articles","category-business","category-news","tag-articles","tag-news","tag-updates"],"_links":{"self":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16643","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/comments?post=16643"}],"version-history":[{"count":1,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16643\/revisions"}],"predecessor-version":[{"id":16644,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16643\/revisions\/16644"}],"wp:attachment":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/media?parent=16643"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/categories?post=16643"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/tags?post=16643"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}