In the first of my 2023 articles on trends in the manufacturing industry, I’m sure it won’t come as a surprise that I’m focusing on environmental, social, and governance (ESG) following our having achieved our B Corp status at the end of 2022.
So What Is ESG?
Environmental, social, and governance (ESG) refers to the three central factors in measuring the sustainability and societal impact of an investment in a company. These criteria help to determine more accurately the future financial performance of a company by considering how it manages its environmental and social impacts, as well as the governance structure and ethical behaviour of its business. In the manufacturing industry, ESG is becoming an increasingly important consideration for both investors and consumers, as concerns about the environmental and social impacts of production processes continue to rise.
Going Greener For Good
The environmental factor of ESG evaluates a company’s impact on the natural world and the steps it takes to reduce that impact. For those of us in the manufacturing industry, this can include issues such as energy consumption, greenhouse gas emissions, waste management, and the use of hazardous materials. Companies that score well on the environmental factor are typically those that have implemented strategies to reduce their carbon footprint and minimize their waste and pollution. I am immensely proud of the team at Morgan for having our efforts in this regard recognised when we achieved our B Corp status at the end of 2022. It was a long and challenging process but we are a better and stronger business as a result of our hard work and the focus we gave to all areas of our operations.
Good Vibes Only!
The social factor of ESG looks at how a company treats its employees, its customers, and the communities in which it operates. This has always been one of the cornerstones of our culture here at Morgan and we have a core focus on issues such as working conditions, diversity and inclusion, and our relationship with all our stakeholders.
Manufacturers that score well on the social factor are typically those that have strong employee relations and prioritize the well-being and safety of their workers. They may also have programs in place to support the local community and engage in philanthropic activities. As anyone who knows us will know, this is incredibly important to us and the team. Our people are at the heart of our business and we strive to foster a happy working environment, which promotes teamwork and inclusion. Morgan was an early adopter of flexi-time and operates an optional four day working week. Not only does this give staff more free time it also reduces travelling time and fuel use, a definite win-win!
Governing Principles
The governance factor of ESG assesses a company’s leadership, management pay, and the overall ethical behaviour of the business. This includes issues such as transparency, board diversity, and the alignment of the company’s values with those of its stakeholders.
Companies that score well on the governance factor are typically those that have strong corporate governance structures in place and prioritise ethical behaviour and transparency in their business practices. We have always striven to ensure that our approach to innovation is rooted in addressing a societal need. We focus strongly on bringing benefit to people’s lives, investing a significant proportion of profits investing in ideas that may assist in people’s well-being and quality of life.
Investing In The Future
So how does a company go about improving its ESG performance? Well, there are a number of ways in which manufacturers can do this and they are a mix of low hanging fruit and longer term, more resource intensive measures. One key strategy is to reduce their energy consumption and greenhouse gas emissions through the use of renewable energy sources and energy-efficient technologies. This can not only help to reduce the company’s environmental impact, but it can also lead to cost savings and improved financial performance. Here at Morgan we constantly invite ideas from our whole team on how we can become more environmentally friendly and implement as many of these ideas as we can.
The manufacturing industry has the potential to make a significant positive impact on the environment and society. By prioritizing ESG, manufacturers can not only reduce their negative impacts, but they can also create value for their investors and customers, while also positioning themselves as leaders in sustainability. As concerns about the environmental and social impacts of production processes continue to rise, ESG will become an increasingly important consideration for both investors and consumers.
What About You?
If you’ve also taken steps to improve your ESG performance I’d be really interested to hear how this has worked for you and if anyone has any questions about our journey to B Corp status, why we believe this is important to us as an organisation or how we’re planning to build on this then please don’t hesitate to get in touch.
