How your energy decisions can help you reach ESG targets

24 August 2023

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How your energy decisions can help you reach ESG targets

ESG targets are vital in this day and age, but businesses are going to struggle to meet them if they aren’t making more prudent energy decisions now and in the future. As the need for ESG increases amidst pressure from consumers, investors and governments, how exactly can businesses make sure they reach the targets they’ve laid out for themselves?

If you’re involved with energy decision-making within your business, then this resource can provide advice to support your approaches as you seek to meet ESG targets. It also offers insight into the importance of ESG, which you can inform employees across your organisation on  and ensure they’re adhering to policies going forward.

Why businesses need ESG targets

Why is ESG important for businesses? Environmental, social and governance goals are set to help businesses manage their impact on the environment and society. As more and more businesses are seeking the need for ESG targets, as well as doing the right thing there’s no additional shortage of reasons they’re doing so:

  • Reduced costs: ESG targets that seek to reduce waste and materials (in packaging, for instance) can greatly reduce costs. Likewise, policies designed to reduce energy costs, such as switching to LED lighting, can mean lower overheads thanks to smaller energy bills.

  • Attracting and retaining employees: Nowadays, ESG policies are an attractive proposition for people looking to work for companies who are committed to helping the environment, create a diverse and inclusive workplace and have programmes in place to improve mental wellbeing.

  • Attracting customers. Companies making a conscious effort to make changes and support the transition to a greener world are likely to have an advantage over competitors who aren’t. Even if they may cost more, some customers are opting for greener products as the knowledge around climate change comes into greater focus.

  • Securing investment: Carried out by Charles Stanley, research has shown that nearly 50 per cent of investors are seeking out more ESG investments over the next three years.
  • Improved company reputation: Being transparent about the business’ endeavours to help the environment, implement diversity and equality policies and making more ethical business decisions can have a positive effect on how others perceive your organisation.

The role energy usage plays in ESG targets

ESG, energy and its usage all go hand in hand. The environmental element takes into account how a company uses natural resources, and how its usage across its operations (including supply chains) affects the environment. Thus, ESG targets that aim to reduce carbon emissions and their impacts, are shaped greatly by a business’ usage and consumption of energy.

Failing to heed the environmental importance of ESG can create all manner of risks for companies. When they fail to act on reducing their carbon emissions or protect against avoidable workplace disasters, companies can be hit with governmental or regulatory sanctions, as well as criminal prosecution and damage to their reputation. And all of these can massively hurt shareholder value.

ESG targets, then, can minimise these risks greatly.

Reaching your ESG targets through improved energy decision-making

If you’re new to ESG, or just need to recalibrate your efforts towards meeting your ESG targets, then here are a few effective solutions that could help with your  journey.

Seek out energy efficiency opportunities
Your business’ facilities themselves are going to be a huge source of energy usage, so maximising energy efficiency across offices, factories and warehouses is essential. Conducting an energy audit, and making them a routine occurrence, can help you to identify the areas where energy is being wasted – and where you can start reducing costs.

The more extensive you are the better, so you’ll need to investigate interiors, exteriors, fixtures and equipment. Once you’re done, the view of your current energy usage will show you what needs to be rectified in the future, including potentially using renewable gas and electricity.

Opt for modern technology
If your business is still working on old devices or with old equipment, then chances are it’ll be facing some sizable bills. Things like LED lighting and laptops rather than desktop computers can cut down on your monthly overheads, and create sizable long-term savings too. Plus, you’ll help to make colleagues’ jobs easier and more comfortable as well.

Increase ESG awareness in your company
Making colleagues aware of ESG efforts, and getting stakeholder buy-in can be achieved by establishing clear ideas on what ESG can do for a company.

A strategic ESG plan makes these actions, and associated targets, coherent and clear cut. As well as raising awareness, it sets an example by management – which ideally should have the company as a whole following suit.

The views, opinions and positions expressed within this article are those of our third-party content providers alone and do not represent those of SEFE Energy. The accuracy, completeness and validity of any statements made within this article are not guaranteed. SEFE Energy accepts no liability for any errors, omissions or representations.

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