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What Is ESG? Meaning, examples and benefits for your business
Running a business means juggling to keep your customers happy and investors reassured. But recently, expectations have shifted; it’s no longer just about making a profit, it’s also about how you make it.
Environmental, Social, and Governance (ESG) factors are forcing savvy businesses to rethink their strategies. Customers now expect more from the brands they buy from, investors are scrutinising where they put their money, and regulations around carbon emissions and waste management are tightening.
A massive 83% of consumers believe companies should follow ESG best practices, while 89% of investors consider ESG when choosing where to invest. It can feel like a lot to keep track of, but this guide breaks it down into clear, practical steps.
In this blog:
What is ESG in business?
Let’s start with the basics: what does ESG stand for?
ESG stands for Environmental, Social, and Governance. It’s a set of standards that shape the way your business operates in relation to the planet and the people living on it.
While closely linked to standards like ISO 14001 (which focuses on a business’s environmental management and sustainability efforts; you can read more about what ISO 14001 is here), ESG is much broader. It goes beyond sustainability to include areas like Diversity, Equity, and Inclusion (DEI), employee wellbeing, ethical supply chains, and corporate governance.
In practice, ESG shapes how your business operates day to day, and in turn how it’s viewed by customers, investors, and regulators.
The 3 core ESG principles
To understand ESG properly, it helps to break down each area::
Environmental
Environmental criteria look at how a business takes steps to care for the planet. It covers the risks and opportunities related to climate change, natural resource use, pollution, and biodiversity.
This might include:
- Examining energy use and efficiency
- Assessing how much waste and pollution a business generates
- Looking at how companies extract natural resources, e.g. oil and metals
- Whether a company owns contaminated land
- How a business disposes of hazardous waste
- How companies manage toxic emissions to comply with regulations
Social
Social criteria assess how a company manages relationships with its workforce, suppliers, customers, and local communities where it operates.
This involves looking at supply chain labour standards, customer service, and levels of workforce diversity. Questions often asked here are:
- Does the company show a high regard for employee Health & Safety?
- Do they invest a percentage of their profits back into the local community?
- Are their suppliers operating ethically?
Governance
Governance focuses on how a business is run at a leadership and structural level.
Investors looking at a company’s ESG want to see:
- Accurate accounting reports
- Transparent methodologies
- Anti-corruption and ethical practices
- How companies treat shareholders
- Shareholder right to vote on important issues
- Executive pay transparency
- Effort to avoid conflicts of interest when choosing board members
The importance of an ESG strategy
So, why invest your time and resources into creating and following an ESG strategy?
The short answer is: caring for the environment and finding more ethical ways to run your business have become more critical than ever, with consumers and investors both looking closely at whether a business operates without causing harm.
Here’s a more in-depth breakdown of why an ESG strategy is critical:
- Investors are watching — Investors now tend to assess ESG performance when making decisions. The ability to show off scores and ratings from certified providers can now influence whether you’re awarded vital funding.
- Regulations are getting tougher — The EU’s Corporate Sustainability Reporting Directive (CSRD), the UK’s Transition Plan Taskforce (TPT), and the International Sustainability Standards Board (ISSB) ‘s reporting standards are mandating environmental compliance across the globe, meaning it’s no longer optional to make strides towards an eco-friendly business model.
- Demands are rising — Customers and employees are now demanding more from the brands they support in terms of transparency, ethics, and sustainability efforts.
- Reputation is at risk — Failing to meet expectations can damage your reputation, make recruiting new staff difficult, or break down customer trust.
- Supply chains are tightening — Big businesses often need ESG certifications and relevant performance data from their suppliers to maintain essential partnerships with stakeholders.
And it’s not just about staying compliant and ticking boxes to keep others happy; there are clear benefits to getting this right:
- Stronger brand reputation
- Attracting investors who fund based on ESG performance.
- Cost savings through energy efficiency and waste reduction.
- Building employee engagement by nurturing an inclusive culture.
- Access to new eco-conscious markets and customers.
How does the ESG framework work?
An ESG framework gives you a structured way to measure and manage your impact beyond profit.
It uses specific metrics like carbon emissions (Environmental), labour practices (Social), and board diversity (Governance) to guide strategies, manage risks, and build trust by disclosing current performance and demonstrating how your business plans to improve in the future.
Here’s how the framework looks in practice:
- Measuring and collecting data — Gather data across all three areas, from greenhouse gas emissions and waste management to employee relations and diversity, board structure and anti-corruption policies.
- Choosing your reporting framework — Use recognised standards like the Global Reporting Initiative (GRI) or Sustainability Accounting Standards Board (SASB) to guide reporting.
- Reporting your findings — This data is then gathered into a set of reports to highlight ESG performance across all three areas to investors, customers, and official regulating bodies.
- Analysing results and shaping strategies — Use insights to identify risks (like supply chain vulnerabilities or potential fines for high pollution levels), spot opportunities (like more efficient ways to carry out work), and benchmark performance against competitors. This can then be used to create a set of ESG goals for your company to work towards.
- Integrating strategies — Integrate ESG into day-to-day decision-making, not as a separate initiative, but as part of how your business operates.
Real-world ESG examples and initiatives
Some of the biggest companies in the world have openly shown their commitment to various ESG initiatives, including:
- Apple
According to their 2025 ESG Report, Apple’s suppliers now support over 17.8 gigawatts of clean energy globally. They recently launched the Mac mini, a carbon-neutral product made with over 50% recycled content, and have reduced overall greenhouse emissions by 60%.
- Salesforce
Their initiatives focus on a low-carbon future, striving for a net-zero status and 100% renewable energy. They also prioritise workplace equality through employee rights and pay initiatives, and use a 1-1-1 philanthropy model to leverage equity and employee time for community impact.
- Microsoft
In their 2025 Environmental Sustainability Report, Microsoft confirmed they exceeded its land protection plan by 30%, conserving local wildlife habitats. They also diverted 85% of construction waste away from landfill (beating their target six years early) and have provided over 1.5 million people with clean drinking water.
How to measure ESG initiatives
Getting a clear picture of your ESG risks is crucial to successfully managing them. But how do you actually measure your business’s progress to make sure things are heading in the right direction?
Here’s the easiest way to start:
1. Carry out internal reviews
Talk to your employees and customers to understand their concerns and identify areas for improvement. Anonymous surveys can help uncover any issues that might not surface in face-to-face conversations, providing a confidential way to take on valuable feedback and insights about your business.
Don’t forget to check in with your suppliers, too. Potential risks here can easily be missed but can cause significant brand damage, so don’t overlook them.
2. Gather data
Certain ESG factors, especially environmental, can be physically measured. From pollution levels to the amount of waste your business produces and where this is sent, recording the data helps to better understand where your company is falling short of goals set out in your ESG framework.
3. Prioritise risks
Next, you’ll need to prioritise the risks you’ve identified from most to least important, making sure you focus your efforts on the areas with the greatest impact whether that’s regulatory risk, environmental impact, or reputational exposure.
For example, if your internal reviews have uncovered environmental measures slipping through the net, this could land you with a fine if not addressed as soon as possible. On the other hand, something less serious, like giving employees a dedicated charity day, isn’t as much of a pressing issue.
4. Use software tools to log data
With so much data to keep track of, storing your findings in physical folders that are easy to misplace or forget about isn’t the most efficient way to assess your business’s progress. Using a dedicated ESG management software can help you gather data, score risks, and monitor them over time so nothing slips through the cracks.
Which businesses can benefit from an ESG strategy?
Almost any business can benefit from an ESG strategy, whether you’re a start-up or a large corporation. These frameworks aren’t just for heavy industries that pump out fumes and hire in the thousands; they also help smaller businesses create strategies for long-term performance, compliance, and competitive advantage.
While any business can benefit from introducing an ESG strategy, some industries see more advantages than others. These include:
- Energy — Focusing on renewable energy generation and reducing emissions.
- Finance — Incorporating ESG into risk analysis and investment decisions.
- Tech — Targeting energy efficiency and data privacy.
- Manufacturing — Looking at waste reduction and ethical supply chains to make sure no employees are being exploited.
- Retail — Focusing on sustainable sourcing and fair labour, including the avoidance of ‘sweatshops’ and giving all employees a fair wage.
- Agriculture — Working on improving yield and finding more environmentally friendly methods of pest control.
- Consulting/Services — Tracking Scope 3 emissions (indirect greenhouse gas emissions in a company’s value stream), such as travel and cloud usage.
How to achieve ESG certification with Be Certified
If managing ESG risk feels overwhelming, you’re not alone. Many businesses struggle to navigate the reporting requirements and find steps to help their business save money while standing out from the competition.
Our ESG Essentials platform offers a user-friendly solution designed to:
- Help you identify and prioritise ESG risks specific to your business.
- Guide you through implementing best practices with clear, actionable steps.
- Simplify the ISO certification process using management software that helps you work through ISO requirements and organise your documentation.
- Keep track of ongoing monitoring and reporting with digital tools.
Whether you’re a small business or a larger enterprise, this platform helps you turn ESG risk management from a challenge into a strength.
You can explore the full details and get started here.
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