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Why should SMEs be interested in ESG practices?

/ AIMS News

Author: Lesley Anderson

ESG and SME
We now expect the big corporates and global operators to practise good Environmental, Social, and Governance (ESG) responsibility. But it can be beneficial for small and medium-sized enterprises (SMEs) to take this approach too. Here’s why:
 
  1. Engaging in environmentally friendly initiatives, social responsibility, and ethical governance can appeal to customers, investors, and stakeholders, giving your brand a boost.
  2. Many investors, including institutional investors and venture capitalists, now consider ESG factors when deciding where to invest their money, giving you a better chance of attracting capital if you’ve adopted ethical and sustainable business practices.
  3. As well as helping our planet during a time of climate catastrophe, ESG practices often lead to improved operational efficiency and cost savings. For example, energy-efficient measures can reduce utility costs, waste reduction strategies can lower disposal expenses, and sustainable supply chain practices can improve resource management.
  4. People increasingly seek to work with and in companies that align with their values and offer a positive impact on society. Engaging in ESG practices could help you to attract and retain the best people. Employees are often better motivated and more engaged when they feel they are part of an organisation that truly values social responsibility and sustainability.
  5. ESG practices often align with regulatory requirements and evolving legislation. By proactively integrating ESG considerations into your operations, you can keep up with and even stay ahead of regulatory changes.
 

These are just a few of the compelling reasons why adopting ESG practices is a sound financial decision as well as a moral and ethical imperative. If you’d like to speak to an accountant with expertise in this area, to help you develop good ESG practices, contact us. We’ll put you in touch with one of our friendly experts!

You can find our network of AIMS accountants here. We’re a friendly team of experienced business owners who enjoy helping SMEs to grow and thrive.