What is ESG?
Socially responsible companies, including many cooperatives and credit unions, are implementing Environmental, Social, and Governance (ESG) programs to make a positive impact on the world around them. Customers, clients, members, and the public are looking to invest for impact and to do business with companies that align with their values.
Focusing on environmental impacts is imperative for a company’s own sustainability as well as the health of the natural environment. As the effects of climate change are increasing and undeniable, companies are doing their part to protect and preserve the planet.
With growing disparities and inequities along the socio-economic scale—and the need for action to improve our understanding of diversity, equity, inclusion, and justice in our communities and in the workplace—companies are looking at their own practices and being asked to show what they’re doing to make things better. Customer and employee engagement, human rights and safety, and community relationships are central to social cohesion.
The ethics, transparency, and growth strategies of a company are all part of its governance system. Governance reveals how decisions are made, who has a seat at the table, and how a company is meeting the needs and expectations of external stakeholders.
“ESG (Environmental, Social and Governance) impact is now a mainstream concern for all businesses. Corporations are expected to consider how their business operations affect the natural environment, as well as their workers and wider communities.
Customers and investors are making decisions based on these factors and so firms need to assess their ESG impact and to report to business owners and other stakeholders in a clear and consistent way.”
—Business Council of Co-operatives & Mutuals
What does it mean to the Co-op?
Being a cooperative means we don’t just care about profit, we care about people and the planet:
- Caring about the planet means that we set a net zero emissions goal for 2030, as well as several other internal waste-reduction and energy-use goals. It also means that we develop strategies to reach those goals.
- Caring about people means we empower our employees, that we treat our customers well, and that we help our community through partnerships and donations.
- Having a strong governance system means we’re governed by our members through a good governance structure, with transparency, future-thinking, and participatory governance.
Co-ops are socially responsible businesses by their very nature. Aligning our business practices to ESG strategies and the cooperative principles creates value for our members and improves our environmental and social impact. That’s one of our key differentiators.
Co-ops that have a strong ESG program are better suited to understand and plan for the world we live in. Together we can work toward our common goals and shared values to create the kind of business we all want to be a part of.