With the transition to corporate sustainability comes ESG certification. But what does it mean to be able to access this certification, why is it important for companies? How is it obtained? And what are the advantages that companies can obtain thanks to ESG certification? These are the main questions that the entrepreneur asks himself when facing this novelty. In this article we will look at each one in depth.
ESG certification, what is it?
ESG certification evaluates the sustainability of organizations, in particular their ability to align with a series of fundamental requirements for sustainable development from an economic, environmental, social and corporate governance point of view, based on a series of operational standards that should inspire a company’s new strategies.
ESG certification is a tool that allows all companies to demonstrate their commitment to operating according to criteria of transparency, responsibility and good governance, with the aim of significantly reducing environmental impact. This commitment is synonymous with quality and seriousness which allows us to take care of our corporate reputation towards our stakeholders: investors, customers, employees and local communities.
Why is it important to obtain ESG Certification?
There are several advantages that companies can benefit from by accessing ESG certification, let’s see a list:
- Company reputation: sustainability policies have a positive impact on the reputation and, consequently, on the image of a company.
- Finanziamenti green: Grazie a questa certificazione le aziende possono accedere più facilmente ai finanziamenti green e attrarre investitori sempre più attenti alla sostenibilità.
- Improve your management: Preventing environmental or social problems can avoid damage to your company’s reputation or legal sanctions.
- Efficiency and savings: Reducing the environmental impact also means reducing energy costs.
- Attracting investors: Companies can not only contribute to a more sustainable future, but also gain tangible benefits such as attracting responsible investors which could mean a greater presence in the market.
How to obtain ESG Certification?
To obtain an ESG certification the company must:
- Understanding ESG criteria
It is crucial that before undertaking the ESG certification process, the company must have a deep understanding of ESG criteria, and key existing standards such as the Global Reporting Initiative (GRI), the United Nations Global Compact (UNGC) and Sustainability Accounting Standards Board (SASB). These standards provide guidance on key areas of sustainability and how to measure business performance in these areas.
It is then important to start an internal assessment to understand the current state of the company’s ESG performance.
- Develop an ESG strategy
This strategy must establish specific objectives and initiatives to improve corporate performance in the environmental, social and governance areas. For example, it could include implementing policies to reduce carbon emissions, adopting responsible supply chain management practices, or increasing diversity and inclusion within the organization.
It is necessary that a monitoring system is implemented within this strategy that allows the collection of specific data on sustainable processes within the activity.
- Start Certification
Once significant results have been achieved in terms of ESG performance, the certification process can begin.
- To communicate
Once certification is obtained, it is essential to communicate the results transparently to interested parties. This can be done by publishing sustainability reports, participating in awareness initiatives and including ESG information in corporate communication materials.
Who issues ESG certifications?
There are several agencies internationally that offer this service, each with their own methodologies and standards. Below are the international organizations that have identified guidelines and tools to help companies improve their ESG performance:
- Global Reporting Initiative (GRI)
- Sustainability Accounting Standards Board (SASB)
- International Integrated Reporting Council (IIRC).
