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Understanding Environmental, Social and Governance

Environmental, Social and Governance

Environmental, social, and governance (ESG) issues have gained momentum and now feature prominently in the corporate world. ESG is no longer a tick-box exercise and is a legal and regulatory requirement for some companies. PLCs, financial institutions, insurance companies, institutional investors and large private companies identify ESG factors to create value, minimise risk and enhance their brand reputation.

What is Environmental, Social, and Governance?

Environmental criteria refers to how well a business performs with respect to its environmental impact.

Social criteria refers to how a business manages relationships with employees, suppliers, customers and the communities in which it operates.

Governance criteria refers to a company’s leadership, strategic values and the distribution of rights and responsibilities among different stakeholders within the business.

Why is ESG relevant to SMEs?

At present, there are no requirements for smaller companies to undertake ESG reporting. But businesses of all sizes should consider how ESG criteria may impact the future of their business. It is a useful framework in which smaller businesses can demonstrate credibility to potential employees, lenders or investors. If it’s important to them, it should be on the radar of all SME boards.

Our specialist corporate solicitors can advise on ESG policies and explain how ESG criteria can add value to your business.

Loosemores is a boutique law firm with in-depth knowledge and expertise. Our Corporate and Commercial department regularly advises on a range of corporate transactions such as sales and acquisitions, management buyouts, debt and equity investments, and joint ventures.

If you need advice from our team of legal experts, please email commercial@loosemores.co.uk or call us on 02920 224433. Please contact Senior Partner, Mark Loosemore, or fellow Corporate Partner, Siôn Tudur to find out more.

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