The struggle of the last two years, alongside the need for real change when it comes to our impact on the people around us and the planet we live on, has caused a societal shift in our demands not only from our personal lives, but also from the businesses we interact with, work for or run.
This makes it more important than ever for new and existing organisations to consider, and embed, strong ESG values in their culture and business ethos from the get-go. Gone are the days of simply paying lip service to CSR (ESG’s predecessor). It is vital that everything we do as individuals and businesses benefits the environment and our society both now, and into the future. We must therefore hold ourselves, and those around us, accountable and to a much higher level.
In 2018, sustainable investing assets totalled $14.1trn in Europe and $12trn in the United States – with the latter expected to hit $35trn in 2025. Globally, the percentage of retail and institutional investors that apply ESG principles to a quarter or more of their portfolios jumped from 48 per cent in 2017 to 75 per cent in 2019.
It is a positive step forward. The scope for ESG is far-reaching for any organisation. At Converge, Scotland’s largest company creation programme dedicated to the University network, we have actively embedded such principles into our training and business support.
In our 11-year history, we have seen organisations evolve in their attitudes to ESG. Throughout this time, Scottish universities have become hot beds of ESG innovation, consistently nurturing and embedding such values in their core. We have also seen some academic entrepreneurs, who are part of our alumni community, striving to create societal change including, SolarisKit, who are involved in solar energy innovation with strong focus on energy-poor countries, as well as Cyan Forensics, who created a technology to identify child sex exploitation and terrorism materials. Others like Earth Blox reinforce their responsibility on the wider world by democratising Earth observation, providing incredible insights into our world and how it’s changing.
The strength of such businesses, I believe, lies in their placing impact at the heart for their modus operandi. This allows them to attract and retain talent in challenging recruitment times, which during the “great resignation of 2022” is quite an achievement as people flock to organisations that reflect their values and purpose.
Investors are also increasingly looking for organisations that demonstrate ESG credentials. Our strategic partner, SIS Ventures, invests in mission-driven enterprises to help address society’s greatest challenges and needs. Organisations like this one are vitally important in encouraging and engaging with innovators and organisations at every level of their development to ensure they embrace an ESG-focused model to drive success.
Companies like SolarisKit, Cyan Forensics and Earth Blox have a strong advantage compared to the more traditional profit led organisations - the desire to make positive change and the ability to continually evolve and innovate. I strongly believe that it is an absolute must that those new businesses coming to market today ensure that their ESG agenda is strong and well-considered. It will not only stand a company in good stead in attracting talent but also in attracting investment and customers.
Claudia Cavalluzzo, Executive Director of Converge