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23 Apr 2023

Why modern companies cannot do without an ESG strategy

In recent years, there has been a significant increase in companies adopting environmental, social, and governance (ESG) strategies. A report by Bloomberg Intelligence says that Global ESG assets may surpass $50 trillion by 2025.

This shift is driven by several factors, including rising public awareness of sustainability issues, regulatory pressure, and the realization that ESG considerations can lead to better financial performance.

Messe Düsseldorf/ctillmann

Public influence

More and more people around the world are concerned about ESG issues. Here are some statistics that confirm that.

  • European citizens believe climate change is the most critical problem facing the world. According to a survey conducted by the European Investment Bank (EIB) in 2020, 93% of Europeans believe that climate change is a serious issue.
  • Nielsen found that 81% of global respondents felt strongly that companies should help improve the environment.

This rising public awareness significantly impacts companies, as they are increasingly being held accountable for their environmental and social impacts. Businesses that fail to prioritize ESG considerations risk losing the trust of their consumers.

Regulatory pressure

Many countries have introduced incentives to encourage companies to reduce their energy consumption and greenhouse gas emissions. In particular, the European Union is doing a lot in this direction taking a comprehensive approach through a combination of regulations, financial incentives, and voluntary measures.

  • One of the key regulations in the EU is the Energy Efficiency Directive (EED), which sets binding energy efficiency targets for member states and requires large companies to carry out energy audits every four years. The directive aims to reduce energy consumption by 32.5% by 2030.
  • The EU has also introduced the Emissions Trading System (ETS), which is a cap-and-trade system designed to reduce greenhouse gas emissions in the power and industrial sectors.
  • There are voluntary measures and initiatives for business, such as the European Corporate Sustainability Reporting Directive and Eco-Management and Audit Scheme (EMAS).
  • Some financial incentives exist for companies that invest in energy-efficient technologies and renewable energy sources.

These measures contribute to mitigating climate change and offer companies the opportunity to improve their operational efficiency, enhance their reputation, and benefit from financial incentives.

Impact on business

Adopting ESG principles can have an impact on business performance. For example, reducing energy consumption has several benefits. By implementing energy-saving measures, such as upgrading lighting systems or optimizing HVAC systems, companies can lower their operational costs and improve their financial performance. It can also positively affect the company's reputation.

  • According to a study by Edelman, 64% of consumers globally now buy or boycott brands based on their stance on social or political issues.
  • 66% of respondents of a McKinsey survey say that they consider sustainability when they make a purchase.
  • Nielsen found that 73% of millennials are willing to pay extra for sustainable products and services.

There are reasons to believe that in the future, consumers will trust and prefer responsible businesses with a clear position on environmental and social issues.

Companies that prioritize ESG considerations may also be better positioned to attract and retain talent. A study by Cone Communications found that three-quarters of young specialists consider an employer's social and environmental commitments when deciding where to work. By demonstrating a commitment to sustainability and social responsibility, businesses can attract and retain workers who share these values.

As a result, companies are increasingly adopting ESG strategies to meet this demand and to ensure they remain competitive and relevant in today's rapidly changing business landscape.

Easy step to reduce energy consumption

Energy saving is an important aspect of adopting ESG principles, as it can help companies reduce their environmental impact and improve their operational efficiency. You can take the first steps today with FTLV’s innovative technical solutions.

Our vertically integrated tools help businesses to save more than 20% on energy using smart management of engineering systems at the facility. Here are some solutions that are used to achieve this goal:

  • implementation of energy-saving algorithms for all engineering systems, including refrigeration equipment;
  • smoothing peaks of electricity consumption, maximum efficiency in the use of price tariffs, or the exchange cost of electricity.

In addition, FTLV’s products maximize transparency and keep all the equipment under control with the capability of 24/7 monitoring and collecting data. They promptly identify and correct possible problems without stopping any business process or production.

Our solutions are suitable for any type of facility including fitness centers, schools, gas stations, office buildings, manufacturers, etc. We also have ready-made solutions for retail.

Want to know more? Visit our new website and read about FTLV’s unique approach to equipment monitoring.