Discover the importance of ESG and the 5 benefits it can bring to your organization. Improve sustainability, attract investors, and enhance brand reputation. Learn more now. https://www.vuram.com/blog/benefits-of-esg-for-companies/

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Top 5 Benefits
of ESG for Companies

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What is ESG
ESG is the acronym for Environmental,
Social and Governance (ESG). It is a
reporting framework and one of the critical,
non-financial factors that are used for
assessing the company’s performance.

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Higher ESG scores translate into
better ESG opportunities and
healthy profits
ESG score analysis is done by a combination
of natural language processing and machine
learning algorithms along with human efforts.
ESG scores and ESG ratings
play a vital role. There are
several ESG companies, which
objectively assess the ESG
performance.
Independent investors and financial
institutions use ESG score as a proxy to
determine the returns of the company and its
risks.
How ESG Adds Value To Your Business
Without just analyzing the financial performance of a company, investors are more inclined towards ESG considerations. ESG is likely
becoming the heart of mainstream investing as it addresses every aspect of a business - employee happiness, safety of work
environment, safety of customer data, potential threats that an organization may pose to natural bodies or climate changes.

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Top 5 Benefits of ESG for Companies
Compliance Access to Talent
Investment Cost Reduction
Competitive Advantage
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Compliance
ESG reporting has been made mandatory in several
countries, including US, UK, China, New Zealand and other
European countries.
The ESG disclosure report provides transparency and
visibility into an enterprise’s activity for its key stakeholders
- consumers, investors, and NGOs.
ESG becomes an important requirement if you want to
maintain a social license and establish business ties and
also explore investment opportunities in other countries.

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Assets
Maximizing the assets, like converting
an unused garage into a daycare
facility is a best example of
sustainable investment
ESG innovation
Investors are increasingly looking for
technologies like AI, machine
learning, to identify ESG risks and
opportunities
“Green” workplaces
Bringing in ban on the use of plastics,
and emphasizing on the green
initiatives are in the trend.
Did you know?
According to a study conducted by
Gallup, 48% of investors are
interested in sustainable investing
funds.
Future-ready
Investors in the new normal
are looking for sustainable
businesses
Investment

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Competitive Advantage
In this dynamic business landscape, organizations should
equally prioritize employees’ and customers’ happiness.
A good ESG plan should include ways to improve the ethics
and commitment to act in the best interests of your employees
and customers.
These days, consumers are satisfied and more likely to deal
with companies that can offer them sustainable purchasing
options and are more wary of the environmental impact, given
the rising cost of fuel and the use of energy that is being spent
across our lives.

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Access to Talent
1. The new gen-Z workforce is more conscious about ethical
workplace, diversity & inclusion, and other moral policies
2. ESG contributes to creating a great work culture to attract
and retain top talent.
3. As a lot of people are becoming mindful of preserving the
environment, especially post the pandemic, they also intend
to join a workplace that aligns with their principles.
4. While they are already taking action themselves they want
to know what else they can do in the organization.

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Cost Reduction
60%
cost-savings
Eco-friendly
products
Sustainability Supply chain
management
Cloud-based
systems
A report by McKinsey
states that “ESG
strategies can affect
operating profits by
as much as 60%”
Creating eco-friendly
products, innovating
with recycling
options, redesigning
equipment
Introducing a fleet of
electrical delivery
trucks to reduce
carbon emissions,
offering flexible
working hours to
employees
Efficient resource
management, risk
mitigation,
innovation, process
optimization,
improved supplier
relationships, and
long term stability etc
are ways in which
ESG can help
Moving to a cloud
based system can
help reduce the
carbon footprint,
using renewable
energy sources are
some of the few
cost-cutting ESG
strategies for
organizations.

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The Verdict
Companies across the globe have started realizing the
importance of ESG.
According to a study, ESG CIO survey 2022, more than 53%
of investors regard climate change as the most important
affecting their investment decisions, up from 47% in the year
2021.
The study highlighted that nearly 78% are concerned about
the negative impact climate change has on the economy.

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