Sustainability as a concept relies on the understanding that there is a deep interconnection between environment, society, economics, and politics. Issues in one area can spill over to other areas and exacerbate in a negative feedback loop.
Instead of concentrating only on the “financial bottom line” (profit/loss), socially conscious entrepreneurs often manage and measure their businesses through a ESG (environment, social, governances) framework. Sustainability issues that businesses need to tackle under ESG standard can be very broad, for example:
- Environmental – CO2 emissions, logistics, manufacturing, material sourcing, packaging, procurement, energy usage, water and waste management, property management, etc.
- Social – human rights in the value chain, supply chain management, type of employment, employee health and safety, equality and inclusion, privacy and data security, community relations, product quality and safety, sales and marketing practices, etc.
- Governance – management structure, business ethics and leadership principles, legal compliance, executive compensation, audits, internal controls and risk management, etc.
In addition to general positive environmental and social impact, sustainable management approach can crate extraordinary opportunities for business innovation, increase employee and customer welfare, support the development of a coherent organizational culture, reinforce the brand or even open up new business revenues.
However, sustainability can also be a significant risk. Risks jeopardize the achievement of the organization's goals. To minimize the frequency or impact of risks and to be prepared for risks, it is necessary to manage the risks consciously through risk assessment and by establishing a risk management system.
Grant Thornton Baltic can help its clients in building a tailored ESG system or resolve specific sustainability issues related to environment, social capital, human capital, business model or leadership and governance:
- Strategic business advisory
- Legal advisory and compliance
- Business risk services
- Data protection and privacy
- Data analytics and digital services
- Seminars and trainings
If you have similar challenges and questions, please contact our specialists.