In recent years, public awareness of environmental protection and social responsibility has significantly increased. More and more consumers are beginning to pay attention to the environmental and social impact of companies' products and services have.

Expectations and demands for businesses to take responsibility in areas such as environmental protection, social responsibility, and governance - collectively referred to as ESG - are higher than ever. Consumers are increasingly inclined to support companies that excel in environmental and social protection and have gained public recognition for their efforts. This trend is particularly pronounced in China, where the younger generation is especially concerned about environmental and social issues. Although this demographic represents a relatively small proportion of consumers, their clear stance and active influence are helping to drive widespread discussion of ESG topics on social media, forming a powerful movement.

ESG has become a critical subject in China. From a consumer perspective, an increasing number of Chinese shoppers want to ensure that their purchases are environmentally friendly and sustainable. Thus, a company's commitment to ESG practices is increasingly becoming one of the key criteria for consumers when choosing products or services. On the compliance front, ESG is also becoming extremely important for businesses exporting products to the European Union and other international markets.

The industrial and commercial sectors are facing mounting pressure to incorporate ESG into their standard operating procedures. This not only impacts the commercial success of businesses and the development of economic trade, but also the well-being of humanity and the planet.

How Can Corporates Benefit from ESG?

Firstly, treating ESG as a standard operating procedure or policy for organisations and businesses can help reduce their negative impact on the environment and society. At the same time, businesses can also benefit from a healthier environment and society.

The origins of ESG can be traced back to the early 21st century. Over time, it has evolved into an expected standard for the successful operation of organisations and businesses. Investors are increasingly recognising the importance of ESG principles when making investment decisions. Consequently, many companies have started to integrate ESG into their operations and business strategies.

ESG, along with other forms of social recognition such as social licences (formal or informal approval or support granted to businesses or organisations for their activities), benefits consumers and communities. It allows individuals to assess whether the products they purchase or the work environments they are part of are beneficial to them. By adhering to various forms of environmental, social, and governance licences, companies can develop sustainable strategies that minimise their negative social and environmental impact, attracting younger generations of customers and employees who may remain loyal in the long term.

Additionally, environmental and social licences can help reduce health and safety incidents in the workplace, thereby improving employee well-being. As a result, younger generations, particularly investors, are shifting their focus beyond traditional financial metrics like profitability to corporate ESG practices.

Standard Corporate Social Responsibility (CSR) processes, such as recycling wastepaper or organising a charitable performance, can form part of a company's ESG efforts, but they cannot fully satisfy ESG obligations. Unlike CSR, which is an internal initiative designed to achieve corporate goals and potentially address societal and environmental issues through company policies, ESG reflects a company's external impact on investors, consumers, and society, as well as its image.

As investors and consumers become more discerning, their investment and consumption habits are becoming smarter. They are increasingly able to distinguish between companies that are genuinely committed to achieving long-term sustainability for all stakeholders, and those that claim to be sustainable but underperform in ESG practices. Therefore, to achieve ultimate commercial success, it is recommended that companies and organisations integrate ESG and CSR activities into their annual budgets and work plans.

Where Should We Start?

As ESG becomes a global trend, Chinese businesses and consumers are actively embracing it as part of their purchasing behaviour and development plan, thus establishing a new norm. Chinese enterprises are adopting ESG initiatives to attract foreign investors and promote diversified economic growth in China. This has become a key focus for many companies and organisations, particularly those that are well-established.

Thankfully, integrating ESG initiatives does not have to be an overwhelming task. It does not require significant structural changes or dramatic overhauls to standard business and production processes. Companies do not need to disrupt their usual business and operational norms.

One effective approach is to use the United Nations Sustainable Development Goals (SDGs) as a guiding framework. Leadership and management can implement necessary changes based on this framework to address key sustainability issues. Here are some steps that companies can take:

1. Foster Internal Dialogue: Start by encouraging discussions within your organisation about the United Nations Sustainable Development Goals (SDGs). Arrange team meetings to brainstorm ideas for aligning corporate operations with the SDGs. Millennials and Generation Z employees should actively participate in these discussions. Their involvement not only generates fresh ideas, but also creates a supportive organisational atmosphere that values employee well-being, thereby helping to reduce talent turnover.

2. Form a Focus Group or Steering Committee: Establish a dedicated team to examine the SDGs and explore how achieving different goals, such as supply chain sustainability, can benefit the company while generating positive environmental and social impacts.

3. Define ESG Mission and Values: Clearly articulate the company's ESG mission, values, and specific methods for achieving its ESG goals. Ideally, the company's mission should cover all SDGs relevant to its operations.

4. Optimise Internal Structures: Identify and enhance internal systems to ensure operational efficiency while achieving desired ESG outcomes. These outcomes should again align with the relevant SDGs.

5. Integrate into Work Plans and Budgets: Incorporate ESG initiatives into annual work plans and budgets, then begin implementing these initiatives.

6. Monitor and Evaluate: Regularly review and assess ESG initiatives to ensure they yield positive environmental and social outcomes and remain aligned with the SDGs. If existing ESG initiatives fall short, they should be reviewed, reassessed, and adjusted as necessary. This review process should occur at least once every two years. By following these steps, companies can seamlessly integrate ESG into their operations, creating a foundation for sustainable growth and success.

Building Corporate ESG Narratives

Once a company has established ESG initiatives aimed at benefiting the environment and society, it is essential to communicate these initiatives through all relevant internal and external channels, ensuring message consistency. All stakeholders, including consumers, the general public, government bodies, and internal teams, want to fully understand the company's ESG initiatives and commitments. To build a comprehensive corporate ESG narrative, consider the following points:

‧ Highlight ESG Initiatives on the Company Website: Showcase current ESG initiatives that are being successfully implemented to demonstrate the company's commitment to environmental management, social welfare, and long-term sustainability.

‧ Create a Dedicated Bilingual ESG Section: Include a section on the website in both Chinese and English, featuring photos of actual ESG initiatives, along with quotes, stories, and anecdotes from employees and the wider community to highlight achievements in ESG. The content should be concise and free from overly technical or specialised jargon and exaggerated claims. It should also be easy to understand, inspiring, and written in a personable tone.

‧ Produce Short Videos: Create brief videos showcasing the company's ESG initiatives in action, including short interviews with employees, environmentalists, and community members. The videos should feature real ESG activities and include subtitles to accommodate individuals with hearing impairments. Simple, clear graphics - such as basic flowcharts illustrating the implementation process - can also be created and shared on social media platforms.

‧ Incorporate ESG into Media Activities: Always highlight the company's commitment to ESG initiatives during media events. Ensure that internal ESG representatives and other senior spokespeople are available for media interviews and are well prepared to speak about the company's ESG efforts.

‧ Leverage Social Media Platforms: In addition to showcasing ESG initiatives, engage in discussions about ESG and its importance for a more sustainable future. Interact with stakeholders online, share thought leadership, and demonstrate a willingness to discuss challenging issues. Additionally, invite followers to share their own commitments and experiences related to ESG.

‧ Present Concise Social Media Content: Use short, easily digestible content that is reader-friendly. The full ESG story can be detailed in an ESG report linked on social media platforms.

‧ Develop Internal Newsletters: Create an internal newsletter or add an ESG section to the existing newsletter. This should cover ESG-related initiatives, milestones, and other inspiring activities.

‧ Provide Authentic Information: Avoid making exaggerated claims or unrealistic promises. Investors and consumers who value corporate social responsibility and sustainability are not interested in companies that falsely promote a green or sustainable image.

Next Steps...

For established companies and organisations, ESG and other forms of environmental and social responsibility may seem daunting. However, the benefits for both businesses and their stakeholders are undeniable. Furthermore, launching ESG initiatives can also improve individual well-being by having a positive impact on the environment and society.

SPRG can support your business in these efforts by developing an effective ESG narrative and strategy to ensure success with consumers, investors, and public stakeholders. This will help build a loyal customer base, reduce employee turnover, and secure your company's long-term sustainability, thereby benefiting your organisation, the public, and the environment.