In the wake of the Covid-19 pandemic and the global climate crisis it feels like the world is on the brink of pivotal change where the future must offer more than a return to normal.
As part of a trend for lasting change, investors and consumers alike are becoming far more vocal about organisations putting Environmental, Social and Governance (ESG) criteria at the heart of their missions.
As a freelancer, if you haven’t already considered how ESG affects your work it will only be a matter of time before you do.
What is ESG? If you have heard of it, you’ll probably associate it with environmental issues such as climate change and carbon emissions. And yes, this is part of it. Organisations produce ESG reports to document their environmental impacts and assess sustainability.
But ESG also encompasses an organisation’s governance and social practices. It promotes ethical behaviours, diverse leadership, employee wellbeing and seeks transparency for stakeholders.
ESG practices are being adopted across all organisations, and whatever freelance work you produce, ESG is likely to drive the theoretical and practical framework of your output.
But why now? ESG was introduced in 2005 to aid ethical investment. Why is it suddenly so important? One of its biggest drivers are global targets for net zero carbon emissions by 2050. All organisations are expected to contribute, from large corporations and metropolitan authorities, to tiny start-ups. ESG also fits well with the #MeToo and Black Lives Matter agenda of fairness and equality.
But ESG is more than this. Investors are taking it increasingly seriously, with MSCI (a leading provider of investment decision-making tools) reporting that businesses with robust ESG criteria experience lower cost of capital and are less exposed to risks than low ESG scoring companies. Simply put, investors want to invest in companies that adhere to ESG standards. Take Aviva Investors for example, who just days ago said they would not invest in Deliveroo due to the lack of basic rights for workers. ESG is making its presence felt and you, as freelancers, must factor it into your thinking and content.
Despite progress, there is still a way to go. We recently learnt that since the 2015 Paris Agreement on the environment, the world’s 60 largest banks provided $3.8tn of fossil fuel funding.
That said, the rise in ESG means organisations are under pressure to act ethically and transparently, with investors rejecting companies that do not meet ESG standards.
So where does this leave you as freelancers? Even if your current output seems to have little to do with ESG, it won’t be long before you are commissioned to produce ESG related work, or maybe even write an ESG report.
To find out more or get involved, visit the Project Discovery section on The ESG Foundation website. It’s a good place to start to understand how the future is shaping up.