We understand that there is a significant amount of jargon in the world of sustainability and sometimes it is difficult to understand the difference between terms. This is why we wanted to create a blog outlining the difference between ESG and sustainability to help you understand the difference as this is something that is extremely important when developing strategies and reporting.
Sustainability
Sustainability refers to the overall goal of operating in a way that protects people, the planet, and economic prosperity both now and in the future.
Sustainability is about companies focusing on minimising sustainability-related risks and impacts and establishing an overall framework which focuses on setting broader metrics and KPIs.
ESG
ESG stands for Environmental, Social, and Governance and is the framework that helps businesses measure and report on sustainability-related performance.
It’s about how companies track, manage, and disclose risks and opportunities in these three key areas:
- Environmental: examples include GHG emissions, energy use, waste management, water conservation.
- Social: examples include diversity, equality and inclusion, employee wellbeing, supply chain practices, community engagement.
- Governance: examples include board diversity, ethical practices, compliance, executive pay, transparency.
Why the Difference Matters
Neither of these terms are particularly well regulated and therefore there is no guarantee that both terms cover a company’s environmental and social impact. That’s why legislation on sustainability reporting such as CSRD would be welcome because it is bringing consistency to sustainability reporting. Reporting and understanding the differences between ESG and sustainability can help with the following:
- Aligning strategy and reporting: Ensuring goals are backed by measurable performance.
- Communicating effectively: Tailoring messaging to different audiences for example investors care about ESG data; customers may be inspired by sustainability values.
- Avoiding greenwashing: A clear link between sustainability commitments and ESG reporting builds trust and accountability.
Sustainability and ESG are complementary concepts. Sustainability gives businesses a purpose, while ESG provides the tools and evidence to navigate towards it.
How can Achieve Goal 12 Help:
- Strategy Development: We can help implement sustainability strategies that are aligned with your sustainability goals and challenges.
- Compliance: We can help to ensure compliance with relevant legislation and certification schemes, examples include ISO 14001, Ecovadis and compliance with NHS requirements.
- Carbon footprint and reduction plans: We can help you calculate your carbon footprint and create a net zero plan in line with international agreements.
- Sustainable operations and profit improvement: We can help you develop strategies that not only benefit the environment and society but also promote profit improvement.
- Sustainability and ESG reporting: We will help you develop a sustainability report in line with your goals and metrics.
Get in touch to discuss how we can support your sustainability goals.