Wednesday, 24 March 2021

What Do Top ESG Consulting Firms Do?

Like most companies these days , your company is likely to get entangled with environmental, social, and governance (ESG) problems. Therefore, it makes sense to develop a good ESG proposition for one’s business in the present times. In this article, we will discuss an ESG consultant's role and how their services can help improve your business's performance.

Why Is ESG Important For Companies? 

The need for businesses to adopt ESG practices has become more pressing in recent times. In August 2019, the US Company Roundtable issued a new statement clearly affirming the dedication of ESG to a wide variety of stakeholders, including clients, workers, vendors, societies, and, of course, shareholders. 

The acceleration was motivated by increased socioeconomic, governmental and customer exposure to the wider corporate effect, as well as by investors and managers who recognise that a good ESG proposal safeguards the long-term sustainability of a business. ESG has definitely become more than a fad or a feel-good workout as the extent of investment flow increases. This is why more companies are choosing to employ ESG advisory services

How ESG Consulting Firms Help You Adhere To ESG norms?  

Environmental Factors 

Environmental factors are dependent on the impact a business has on the environment. They are based on the idea that market practises have the ability to produce ecosystem, water, air and human health environmental risks. An ESG consultant can help a company adhere to the following ESG factors: 

  • How efficiently does the company use energy?  
  • Does the company use renewable energies that are less polluting and contribute less to climate change than harmful GHG?  
  • Does the company manage waste responsibly?  
  • Has the company adopted responsible practices across its value chain, like animal welfare and deforestation policies?  
  • Has the company disclosed all its information about its environmental policies?  


By following all these practices, an ESG consultant can ensure that your company has positive outcomes like reduced costs, improved profitability and energy efficiency. Moreover, your company's reputational risks can also decrease.  

Social Factors  

Social factors pertain to  the way organisations handle and respect individuals. In other words, it's about the influence corporations have on their workforce and on society. What specifically does an ESG consultant do? 

  • Does your company have an effective diversity and inclusion policy, which ensures there is no type of discrimination?  
  • Does your company provide safe and healthy working conditions for your employees?  
  • Does your company follow labour standards that assure fair wages and human right protection? 
  • Does your company maintain good relations with local communities?  

Focus on the social factors results in the increase of productivity and morale of your employees resulting in a decreased turnover rate.   

Governance Factor 

Governance factors rely on organisational practices and how corporations are regulated. It is about keeping stakeholders' obligations, rights, and expectations transparent so that such needs are fulfilled, and a consensus on the long-term plan of an organisation is reached. An ESG consultant can help you adherer to governance by focusing on  the following factors:  

  • Does your company have an effective tax strategy in place?  
  • Does your company have corporate risk management policies?  
  • Does your company have executive compensation policies?  
  • Does your company engage in donations and political lobbying?  
  • Does your company refrain from corruption and bribery?  
  • Does your company protect shareholder interests?  
  • Does your company refrain from sharing shareholder interests?  

The implications of these strategies will range from aligning the interests of shareholders with management to avoiding negative financial shocks, to gaining better social recognition as a consequence of equally dispersed income. 

In order to ensure that your company adheres to necessary ESG norms and that you are fully aware of all its implications, you could consider employing ESG consulting from SG Analytics.  

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