CSR was a feel-good addition but ESG IS your business

In the wake of rising environmental and societal change, companies are increasingly being assessed by their commitment to ethical standards. 83% of consumers believe companies should be actively working on their ESG practices, and up to 80% say they would be more likely to buy from a company with ESG commitments.¹

In the past, CSR was an effective way to show tangible examples of a company’s values, but with the increasing availability of ESG frameworks, it is no longer enough to use CSR activity as the sole example of ethical standards. Instead, companies must show how these standards are in the very fabric of what they do.

CSR and ESG began at surprisingly similar times, but the increased interest in ESG has happened only recently. Global Google trends show a steady interest in CSR topics over the last 15 years, but an interest in ESG only began to rise in 2019.

Why the increased interest in ESG? Crudely, it provides better ROI. The stock value of companies in the MSCI World ESG Leaders' index rose by 22% in 2021, compared with the remaining companies in the index gaining only 15%². Because ESG goes deeper into operations, manufacturing, supply chain and environmental impact, it seeks value in every corner of the business. Conversely, CSR focuses more specifically on activities that create a positive company perception.

For companies wanting to build positive returns and long-term impact on society, CSR is no longer enough to meet expectations. Adopting the ESG framework has become imperative.

The increasing pace of environmental change, and subsequent human and societal change, means that corporations cannot ignore the urgency of adaptation. Luckily, ESG offers a blueprint to companies beginning that journey and provides knowledge and strategies to set that shift in motion.       

ESG standards will likely become mandatory compliance for companies, particularly those with global operations. In Singapore alone, companies wanting to qualify for MAS retail funds must now meet ESG disclosure standards, mandated to reduce the greenwashing tactics of companies setting their own standards.³

The growth in ESG doesn’t mean we need to shut down our CSR operations for good, as the knowledge and staff gained from CSR activities provide ongoing value for core ESG business activities. Running CSR projects before incorporating ESG activities into the business also allows for a low-risk way to test bed solutions before rolling them out on a larger scale.       

ESG value can also be found in current technology usage. By providing efficiencies and reducing waste, technology intersects all environmental, social and governance aspects of the framework and provides an excellent starting block. For example, in PwC’s Cloud Business Survey of executives from Fortune 1000 companies, 59% of business leaders said they already use or plan to use cloud computing to improve their ESG strategies.⁴

Applying an ESG framework means building wholesale efficiencies into your business and leaving no stone unturned. Considerations must be made for every step of your operations, from planning, product design, delivery, capabilities and employment practices. Using the power of technology to analyse and automate this process can translate into an 11% jump in ESG ranking.⁵

The appropriate application of technology can also reveal weak points and performance opportunities by analysing data collected in your operations. For example, IoT powered by 5G provides solutions to add automation and reduce latency – getting you closer to your ESG goals.  

CSR and ESG have always been about growing the positive impacts of your business but, of equal importance, is preventing the malicious. Building robust cybersecurity strategies supports the governance element of ESG and can prevent the potential USD$137,000⁶ loss of a single data breach.      

By enabling better leverage of cloud and SaaS services, Software-defined WAN (SD-WAN) also builds strength in addressing cybersecurity risks. As traffic moves along a public network, it is prone to eavesdropping, but by encrypting traffic, SD-WAN drastically reduces this risk. With these key benefits, it is unsurprising to learn that by 2025 65% of Enterprises will have implemented SD-WAN, compared with approximately 45% in 2021.⁷

Choosing the right technology can be a challenging task. However, partnering with Singtel can fast-track your ESG journey by equipping you with the right tools and processes to improve efficiencies faster.      

Contact us to talk about how Singtel can help achieve your ESG goals.

References:

1. PWC, 2021 Consumer Intelligence Series Survey on ESG
2. Reuters, How 2021 became the year of ESG investing
3. Straits Times, MAS tackles greenwashing with new guidelines for ESG funds
4. PWC, How cloud can help or hurt your ESG efforts
5. Accenture, Uniting technology and sustainability
6. JP Morgan, Why is Cybersecurity Important to ESG Frameworks?
7. Gartner, Magic Quadrant for Network Services