Take a journey back in time, perhaps in the 20th century, and you will realize one thing: the customers of that time are different from those of today. In the past, an ad on television or billboard on the road was enough to make your product run out of the hyper stores because of massive sales. Well, not any longer.
When you run an ad, your clients will first dig for more information about the brand, and if unsustainable processes were used in production, a campaign against the business is likely to be initiated. For a company that is damaging the environment, the market is likely to shrink fast, and you could even get into conflict with the law.
The best way to smoothly run your company is adopting ESG sustainability reporting. This is a process where you carefully review the company’s operations and plan for strategies to make positive environmental, social, and governance impacts. The culmination of any reporting phase is an ESG report that stakeholders can use to have a clear understanding of the company’s operations. In this post, we take a deeper look at stakeholders in your company and demonstrate why they are so concerned.
ESG Reporting and Stakeholders
Before looking at the concerns by stakeholders, let’s start by understanding the relationship with sustainability reporting. When the idea of sustainability was conceived in 1992 in Rio, Brazil, during the first-ever UN Conference on Environment and Development (UNCED), the focus was on the definition. However, it left the application open for everybody to become a partaker. Well, many are those who still opted to put all efforts on growing profits instead of balancing with the needs of future generations and the safety of the planet. Someone had to step in, and this is where stakeholders come in.
ESG reporting is a process tailored to give stakeholders a bigger role in defining brands’ success. Therefore, businesses are required to operate responsibly and report to stakeholders. For example, investors want to see your ESG report to determine whether to pump more funds into your firm. To help companies move in the right direction and win the affection of investors, most stock exchanges have made it mandatory for all listed firms to produce sustainability reports. Good examples of such exchanges include New York Stock Exchange (NYSE), London Stock Exchange (LSE), and Hong Kong Stock Exchange (HKEX).
Why are Stakeholders So Concerned?
When we talk about stakeholders, the list includes customers, investors, stock markets, regulatory authorities, lobby groups, human rights organizations, education institutions, and any other party directly or indirectly affected by your enterprise. So, here are the main reasons why they are so concerned.
- The Burden from Societal Ills is Becoming So Heavy on Society
From human trafficking to global warming, these ills have become a serious challenge to society. For example, global warming is taking a toll on everybody, with extreme climates and the risk of losing more biodiversity becoming a reality. All stakeholders want to halt the societal ills because they are damaging the only planet they call home.
- The Link between Cause and Consequences of Societal Ills is Clearer Today
Sometimes back, people questioned whether global warming was real or there were other causes of climate change. Well, advances in technology and more data are making it possible to link global warming to causes, such as carbon emissions. So, stakeholders want to be on the right side of history by trying to correct the problem.
- No One Wants His/Her Siblings to Live in a Worse World than It Is
Simulations showing how the world is warming fast because of global warming and the risks of pollution make every stakeholder wonder about one thing: “How will my children live if this world gets worse?” These facts drive people to take every action to save the planet. This is why the demand for responsible companies is growing.
As you can see, the modern customer and other stakeholders are enlightened. They can easily link the future with what is happening today and, therefore, support only the responsible businesses. Therefore, do not hesitate to implement ESG sustainability reporting for your company correctly. To do this, you need the right reporting framework and ESG reporting software. Visit Diginex.com for all the support you need on sustainability.
