With ESG, companies do not save the world, but ensure their own competitiveness

Today’s business landscape is like a constantly evolving organism. In order to stay competitive and create real value, we must look beyond mere profits. We need to see the bigger picture.

With the bigger picture and the long-term view, environmental, social and governance (ESG) principles come into play. These are not just a regulatory obligation, but a powerful tool in the hands of businesses for adapting to a changing world while ensuring their own long-term growth. Research shows that ESG integration can improve company performance and increase investor interest (Deloitte United States) (ESG Today).

Why is ESG the way of the future?

Companies that embrace ESG principles are able to anticipate regulatory changes and manage risks proactively. This means not only avoiding fines and reputational damage, but also ensuring smooth and efficient operations. This approach enables us to maintain a long-term plan and adapt to the fast-changing economic environment. It may often seem that focusing on ESG allocates too much attention on the distant future, but for companies, taking ESG into account means good governance in general, and well-managed companies are more resilient to crises.

Consumers, investors, and other stakeholders are also increasingly favouring companies that demonstrate a real commitment to sustainability and social responsibility. A survey by PwC showed that 90% of asset managers believe that ESG integration improves overall returns (PwC). A strong ESG strategy can improve a company’s reputation and increase its brand value, attracting loyal clients and investors.

Management opportunities and investments

As part of the economic bloodstream, we are always looking for opportunities that offer more than just financial benefits. Companies that are strong in ESG will be able to appeal to a broader base of investors and cooperation partners, including those focused on sustainable and impact investing. In addition, such companies often have better access to capital. Implementing ESG practices is not only the right thing to do – it is also a smart business strategy. Energy-efficient processes and waste reduction can significantly reduce operating costs. A positive and supportive working environment boosts staff productivity and reduces staff turnover.

Innovation and value creation

Different crises and challenges always bring along innovation. Adhering to ESG principles offers companies the opportunity to develop new and sustainable products and services. This opens up new markets and creates unique competitive advantages. If we focus on sustainability, we can create products and services that not only meet the needs of today, but also shape the world of tomorrow.

Estonian companies are known to be adaptable and agile. To get started with the integration of ESG principles, we invite you to participate in the ESG Management Development Programme by EBS, designed to equip business and industry leaders with the knowledge and skills needed in the field of sustainability. It is an opportunity to learn, grow, and take your business to the next level. The programme provides practical tutorials and knowledge to ensure regulatory compliance. With the discount code ‘LHV’, the cost of the development programme is 10% off for LHV clients.

Ultimately, ESG is not just a regulatory obligation, but a strategic opportunity and a necessity. Companies that integrate ESG principles are able to unlock significant value creation opportunities, drive innovation, and ensure a competitive advantage on the market. By being part of this change, we can together achieve a sustainable and responsible business environment that will ensure the success of our companies in the future as well.