By applying ESG criteria, you show that you care for natural resources, your employees and the local community
How to make your business be one step ahead of everyone else
August 22, 2023
If you have a small- or medium-size enterprise, you might already be familiar with the concept of ESG (Environmental, Social and Governance). This abbreviation refers to a set of criteria concerning environment, social responsibility and efficient corporate management, that companies stick to as they manage their business, as these make them more competitive on the market. Investors and banks also take these into account as they make decisions concerning investments and loans.
Research shows that consumers increasingly opt for products by the companies who pay attention to social responsibility and protection of environment. Furthermore, these principles have become a part of public policies and laws, so harmonisation of business strategies with the ESG criteria becomes obligatory for many companies, especially those operating on the EU market.
What does ESG mean in practice and what does it bring to businesses?
In what way does company manage waste, how efficiently does it use natural resources, what good does it do for the local community in which it operates and the people that live in that community, in what way does it stimulate gender equality and inclusion of those belonging to sensitive social groups in their business – these are but a few questions covered by the ESG criteria. If the company’s business strategy is in line with these criteria, then its business is sustainable.
“By conforming to the ESG criteria, small and medium-size enterprises get multiple benefits. Sustainable operation increases business’ respectability, is more efficient, results in financial gains through decreased costs and risks, and contributes to the business’ development, as it increases chances of investment and attracts responsible and talented workforce,” emphasises Maja Mandrapa Gašić, Portfolio Manager for Sustainable Business within the United Nations Development Programme (UNDP).
Research shows that more than 50% of consumers in European countries, such as Italy or Netherlands, are ready to pay more for products which have ecological packaging, or are produced by companies certified to operate in line with environmental protection standards.
“In order to support small and medium-size enterprises in Serbia in improving their business, during September and October, and in cooperation with the Development Agency of Serbia and Smart Collective, we organise trainings where representatives of enterprises will learn how to integrate the ESG criteria into their business practice and become sustainable,” says Maja Mandrapa Gašić, UNDP Portfolio Manager for Sustainable Business.
The trainings are organised as a part of the “Promotion of Sustainable Investment” programme, that UNDP implements in partnership with the Government of the Republic of Serbia, and with the support by the United Nations Peace and Development Trust Fund (UNPDF) and UN Department of Economic and Social Affairs.