Environmental, social and governance (ESG) factors are now more business-critical than ever before, to the point of determining who will do business with you.

As part of our Business Outlook Tracker, 90% of the 601 business leaders surveyed said that addressing relevant ESG considerations makes their business:

  • More attractive to investors
  • Improves their ability to obtain funding
  • Increases the overall value creation of their organisation.

With a relentless pressure coming from all stakeholders to embrace the ESG agenda, the question now is how, where and when your business is going to respond.

COP26 – a turning point for the mid-market

COP26 ended with much left to do. It’s legacy, including the creation of the new International Sustainability Standards Board, will mean significant change for the UK and delivering on the promises made will require all organisations to play their part.

Before the conference, our Global CEO, Peter Bodin, gave his viewpoint on the support the mid-market needed to achieve net zero. In our latest insight, we assess how far COP26 delivered on these important steps and what still needs to be addressed.

ESG frequently asked questions

1 What opportunities could ESG bring to my business?

Climate-related issues have never been higher in people’s considerations from both a business and personal perspective, and this is set to rise. Integrating ESG so that it aligns to your organisation’s strategy, purpose and values, could add value in a number of ways

  • Help create new markets for goods and services
  • Access to finance
  • Opportunities to innovate
  • More resilient business models
  • Improved bottom-line performance
  • Greater ability to attract and retain talent
2 What are ESG metrics and how do you report on it?

Environment

  • Amount of greenhouse gas emissions
  • Amount of energy used
  • Amount of waste generated
  • % of product from recycled materials
  • % of product that is recyclable or compostable

Social

  • Number of product recalls
  • Number of data breaches
  • Fines related to data security
  • Employee turnover
  • Health and safety incident rates

Governance

  • Diversity on the board
  • Revenues in countries with high corruption risk
  • % of equity owned by the board
  • Executive remuneration linked to ESG programmes
  • Fines or litigation related to business ethics
3 What is net zero?

The term net zero means achieving a balance between the greenhouse gases emitted into the atmosphere versus the greenhouse gases that are removed from it. Net zero will be achieved when the amount of carbon we add into the atmosphere is equal to or less than the amount removed.

4 What is ESG investing and what are ESG funds?

ESG investing allows people to invest in companies that are taking ESG factors into consideration. ESG funds are a form of sustainable investing as they consider the impact the investments have on the planet.

5 What is TCFD reporting and is it mandatory?

TCFD stands for Task Force on Climate-related Financial Disclosures. It was created by the Financial Stability Board to improve and increase reporting of climate-related financial information. TCFD can help companies disclose climate-related financial risks to all stakeholders, including investors, lenders and insurers. These rules are mandatory for premium-listed companies and the UK government announced in 2020 that TCFD-aligned disclosures will be fully mandatory by 2025.

6 What are science-based targets?

Science-based targets provide companies with a clearly defined path to reduce emissions in line with the Paris Agreement goals. More than 1,000 businesses around the world are already working with the Science Based Targets initiative (SBTi).

Targets are considered science-based if they are in line with what the latest climate science says is needed to meet the goals of the Paris Agreement: limiting global warming to well-below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C.

7 What are scope 3 emissions?

The GHG Protocol categorises greenhouse gas emissions into three groups known as ‘scopes’. Many businesses already account for their scope 1 and 2 emissions. Scope 3 has risen up the agenda as it includes accounting for other emissions that the organisation is responsible for

Scope 1 are direct emissions from owned or controlled sources (eg, company vehicles, energy/heat generation at facilities).

Scope 2 are indirect emissions from the generation of purchased energy.

Scope 3 are all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions (eg, employee commuting, transportation and distribution, franchises and investments).

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ESG insights

Nurturing ESG business opportunities for growth

We spoke to business leaders on why an ESG strategy is now business critical.

Read more Nurturing ESG business opportunities for growth

What does the UK plastic packaging tax mean for you?

The government is introducing a new plastic packaging tax in April 2022. Is your business ready for it?

Read more What does the UK plastic packaging tax mean for you?

Refinancing your business loans after COP26

Costing net zero commitments into your plans is key to refinancing your business loans after the COP26 Climate Summit

Read more Refinancing your business loans after COP26

No net zero without supply chain collaboration

The drive towards net zero and energy transition is accelerating. Failure to adapt could leave many businesses behind.

Read more No net zero without supply chain collaboration

Energy sector outlook: previewing the COP26 agenda

The COP26 goals will directly impact the energy sector outlook. We preview them from the perspective of restructuring.

Read more Energy sector outlook: previewing the COP26 agenda

The ESG yardstick: what does your company stand for?

ESG is a yardstick investors and customers can use to evaluate the performance of your firm. How do you get ESG right?

Read more The ESG yardstick: what does your company stand for?

Mid-market ESG hindered by lack of senior support

Nearly all (90%) of the 601 UK mid-sized businesses surveyed considered a strong ESG strategy to be a significant factor within their company.

Read more Mid-market ESG hindered by lack of senior support

ESG and diversity: redefining value for your business

Recent events have altered how investors perceive organisations. ESG and diversity are priorities for planning ahead.

Read more ESG and diversity: redefining value for your business

Survey: how are investors redefining business value?

We asked 17 top private equity houses to explain how they're looking at business value, now and in the next three years.

Read more Survey: how are investors redefining business value?

ESG in financial services

IFRS Foundation creates sustainability standards board

The IFRS foundation’s International Sustainability Standards Board is a key step in global ESG disclosure standards.

Read more IFRS Foundation creates sustainability standards board

Sustainable banking: future-proofing your operations

ESG compliance is becoming mandatory. Our European leads share their insight on the shift to sustainable banking.

Read more Sustainable banking: future-proofing your operations

Financial services outlook: COP26 climate summit

What will the COP26 climate summit bring for the financial services industry? We look ahead.

Read more Financial services outlook: COP26 climate summit

Sustainability-linked bonds: an investment in ESG

We explain the principles of sustainability-linked bonds and how this sustainable finance product supports ESG goals.

Read more Sustainability-linked bonds: an investment in ESG

ESG risk management: building effective frameworks

Defining ESG risk factors enables effective ESG risk assessment and management. We explain why it should be a priority.

Read more ESG risk management: building effective frameworks

ESG: Embedding it into the banking prudential framework

The European Commission recently published a study on integrating ESG risks into the banking prudential framework.

Read more ESG: Embedding it into the banking prudential framework

ESG disclosure: the role of SFDR, EU taxonomy and NFRD

How will the SFDR regulation and the EU non financial reporting directive impact ESG disclosure in financial services?

Read more ESG disclosure: the role of SFDR, EU taxonomy and NFRD

Financial services climate risk webinar series

Our recent series of webinars looked at the financial risk of ESG issues and how you can prepare your business.

Read more Financial services climate risk webinar series

Survey: how are investors redefining business value?

We asked 17 top private equity houses to explain how they're looking at business value, now and in the next three years.

Read more Survey: how are investors redefining business value?

Sustainable nappy brand receives £13 million for global growth

We advised sustainable nappy brand Bambino Mio through a highly competitive auction process to secure £13 million investment from BGF. The investment will support Bambino Mio to expand and accelerate its growth in the UK and internationally.

120x120-peter-jennings.png"As consumers become more conscious of environmental and  social issues, businesses with a sustainability purpose continue  to grow in appeal. This consumer-driven approach is  translating into a change in perspective at strategic levels,  resulting in an investor appetite to acquire businesses with an  ESG approach embedded into their long-term plans.

That’s why mid-market businesses are now highlighting ESG credentials as part of transaction processes. At the same time, investors have become wary of ‘greenwashing’, and see ESG as a topical focus during due diligence checks."

Peter Jennings, Head of Private Healthcare