I’ve been working with businesses offering ESG audits for some time now, when a business owner, CFO or CEO invites you into the business I always feel apprehensive as I don’t want to upset the apple cart or tell them what to do I like the process to be natural I want to see the business operate in a natural environment and I want people to share their working practises with me, how that business runs and more importantly you’re there to help that business and guide them on their next steps.
I have been in business for over 20 years and over the years I have met a lot of business owners and I have learned they never see their own faults, business owners are not always receptive to downfalls, failures and mistakes in the business as I’ve come to learn over the last few years the only way that you strengthen, grow and become more resilient in a business is to learn from your mistakes and move forward on every step, hopefully every business owner should agree with that.
Not every business or business owner understands what ESG is and what it stands for I’ve come across many businesses that have been dismissive to ESG and thought it wasn’t relevant to them and how their business works and operates, ESG which stands for Environmental Social and Governance has around 400 frameworks that sit under the platform of ESG what always surprises me is the culture behind a business, for example when you go into family run business compared to shareholder business, sole trader or partnership you can see how they operate and how many have fallen behind on current procedures, trends & customs and practices.
below is a story of a client that I have attended in the last 12 months and how they operated and how they not taken in consideration of ESG and more importantly from a cost cutting exercise and the profitability and generally ignorant to the fact.
I attended a family run business in the last 12 months they contacted me regarding an ESG audit they initially thought this would be a paper exercise and thought there would be no issues or cause for concern, they were happy with the way they ran their business and for the last 25 years and couldn’t see any cause for concern. One of the issues I have with found with family run businesses is they tend to not look outside the business for help they deal with everything internally and talk amongst the family members and usually a fight for power to make the final decision. In this case I was happy that this wasn’t the case, and they were receptive to change.
When I was doing the audit, I noticed they had lots of plastic 500ml water bottles, when I spoke to the operations manager who confirmed that on a weekly basis, they would order between 10 to 15 crates of water approximately 20 in plastic packaging approximately 10 litres per crate. One of the issues we discovered was this particular office was rented there was no facility in place for them to recycle these plastic bottles and unfortunately these went into general waste (plastic bags) which was emptied two or three times a week and then they would go off to landfill, on average 260 bottles of water a week went to landfill plus the plastic packaging that the bottles was transported in. The client informed me on several occasions they had ran out of water and had to purchase locally, from a supply chain perspective this water was delivered once a week via a truck from the supplier, I looked at the environmental impact on this, diesel emissions, congestion and then the product not being recycled or disposed of correctly.
I advised the client to stop purchasing the water from the wholesaler at the cost of around £200 to £220 a month and install a water filtered & cooler at the cost of £85 plus VAT and for the customer to then buy drinking glasses for the staff, this simple installation and changed the mindset we managed to save the business money.
The manufacture of one pound of PET (polyethylene terephthalate) plastic can produce up to three pounds of carbon dioxide. Processing plastic resins and transporting plastic bottles contribute to a bottle’s carbon footprint in a major way. Estimates show that one 500-milliliter plastic bottle of water has a total carbon footprint equal to 82.8 grams (about 3 ounces) of carbon dioxide. With this is mind the client has saved on average 780 ounces (49 pound) of carbon dioxide a week. I didn’t have the Co2 emissions for the truck and I haven’t included it on the report
Governance
One of the 3 parts of ESG is governance this is how other companies see you and see how you run the business how does the company measure its metrics and how does it move in a positive direction how is the company seen or accepted by the broader society rather than looking at the balance sheet and the profits this is something to take in consideration as over the last few years a few major corporate businesses have been affected by poor ESG ratings.
Every little positive step that we do helps towards making a change big or small will help towards the environment protecting and securing the environment.
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