The Digital CFO

Investors are looking for your ESG Reporting instead of balance sheets. You pay your taxes on time. Also, you give benefits to your employees and investors and you share data to prove that you are doing good in business. But investors want to see more than what you show.  First, is the environment….  You know that the environment has become polluted and that it is profit-making companies that work without caring for the planet. For example, take a manufacturing company that uses chemicals that are harmful to nature. It could be a growing business, but it isn’t good for the planet.  Your ESG measurement of the environment would be lowest if you are exploiting nature for profit. You could be doing well on the finance factor, but your environmental rating would be the lowest. And investors are favoring businesses that are eco-friendly.  The second is social….  You have a business where you have employees that work for your profit. Do you ...

  Before you start ESG Measurement of your business, you should first understand what it is. You prepare annual reports of your business where you show the profit made, taxes paid, and other assets created. But these reports show only the financial side of your business. If you are of the opinion that investors are interested only in profit then you are wrong. They are more interested in knowing whether your business is eco-friendly. If you are spoiling the planet just to make a profit, you won’t get a high rating from investors. Is your business eco-friendly? First, determine how much energy you need to run your office and then check how much energy you consume in a month. If you consume more than needed electricity, you should look at what is making your business guzzle more energy. Also, you should look for ways to reduce your reliance on electricity to increase your ESG rating on energy. Is your business social? Ask your employees how do they rate your business as...

    Before starting ESG reporting , you should know what ESG is and how it could impact your business. It stands for Environmental, Social, and Governance. Simply put, your business should be environment friendly; you should treat employees like your family, and your business process should be transparent.   Why should be worried about your ESG score?   If your company isn’t doing good on the key developmental metrics – Environmental, Social, and Governance – you won’t get investment. Also, you will face roadblocks while walking in the path of growth. Governments of the world and investors prefer businesses that score high on the key developmental metrics.   Your next question should be ESG where to start and the answer is to check how you score on Environmental, Social, and Governance factors. For example, you should check your energy bill. If your energy consumption is high, it shows that you are adding to the carbon footprints of your country. Similarly...

ESG measurement of your business shows the overall performance of your company on key developmental metrics that are Environment, Social, and Governance. Let’s discuss Environmental, Social, and Governance factors in detail Environmental : You know about pollution and how it is harming the planet. But you are silent because you think that saving the environment is the responsibility of the government. Here you are making a big mistake. You are running a company and you are also responsible for keeping the environment safe. Smart investors want to see you as a savior of the planet. You should switch to green technology if you are still using the technology that pollutes the air, water, and soil. Social : How do you hire employees? Do you have the policy to promote the employees? What is your work environment? Do your employees get the freedom to raise their voices in your office? In ESG accounting, you have to show your Human Resource policies related to hiring and promoting t...

If your company isn’t doing well on ESG measurement , you could have a big problem in the future. Everyone including world governments, global investors, clients, and non-governmental organizations working to save the environment wants companies to behave responsibly. Let’s discuss responsible behavior The first is the environment where you have to score high. You use energy that increases your carbon footprint. You should look for ways to make your business energy-friendly. It is your responsibility to reduce your carbon footprint and it is possible only when you use clean and green technology. You should optimize your energy consumption to become an energy-friendly company. Second, is the social front where you need to practice equality. Your ESG reporting should show that everyone is equal in your business and you give equal opportunities to everyone. Your business should be a place where anyone can find a place based on talent instead of color, caste, religion, or region. It is...

As expected from a responsible company, you should be worried about your ESG rating . Your company has to perform well on the environmental, social, and governance front. Your company should be environment-friendly. Your social structure should be supportive, and your governance should be strong.  Let’s simplify the topics   Environmental : Everyone knows that the environment has become too polluted to become clean with any measure other than reducing carbon footprint. And the responsibility of reducing the carbon emission lies on companies like yours. Today every company has to be environment-friendly. In your case, you need to reduce the carbon footprint of your company.  Social : When you hire an employee, what do you see in that person. When the focus has to be on ESG , you should look only at talent. Your company should give equal opportunity to everyone and you should hire employees without any discrimination of color, caste, religion, and region. Also, the...