Decoding ESG — A Concept for Sustainable Business
Publish On 23, Jul 2021 | Decoding ESG — A Concept for Sustainable Business
In business, ESG, or Environmental, Social, and Governance, is a topic of interest for both listed companies and investors all over the world because a company’s vision and corporate social responsibility are no less important than the financial statement.
Therefore, in this edition of the Sustainability Column, we invite you to learn about ESG together and decode how to conduct business sustainably by integrating ESG for sustainable development and enhancing competitiveness in the global market.
Definition of ESG
ESG is an acronym for three key aspects which must be managed to ensure sustainable business practices: E-Environmental, S-Social, and G-Governance. All of these play interrelated roles in helping to reflect the company’s responsibility to all sectors.
Beginning with E—Environmental, management is necessary for every part of the supply chain, from natural resources and energy upstream to emission of waste, garbage, pollution, and greenhouse gases downstream. Organizations must take responsibility for innovating manufacturing processes and products that are as environmentally friendly as possible.
Next is S—Social, which can be looked at both on a macro level and within the organization itself, to ensure fair treatment of labor and employees, accountability to customers and partners, and involvement in social and community development. Finally, G—Governance refers to the conducting of business with transparency, trustworthiness, good corporate governance, ethics, and morality. These components together ensure that a business can operate smoothly and happily for everyone.
Chemicals Business, SCG: Towards a Chemicals Business for Sustainability
The ESG concept is consistent with the goals of Chemicals Business, SCG, with regards to both the circular economy and the goal of becoming a Chemicals Business for Sustainability, which emphasizes conducting business in a way that maximizes benefits for all sectors.
Environmental consciousness is a policy that SCG has always implemented through circular economy principles, which, aside from promoting resource optimization, also elevate business operations through roadmaps in order to maximize outcomes throughout the entire supply chain with the development of plastics innovation, from the design of plastic resin and solutions that facilitate recycling while fully retaining original properties, to recirculating post-consumer plastics back into the system to produce high-quality plastic resin once again or for use as raw materials in the petrochemicals business, all the way to the innovation of bioplastics.
Aside from developing innovations in plastics, SCG has also improved the efficiency of its production processes in order to reduce the use of resources and the production of waste as much as possible as well as established the SCG Green Choice mark to give consumers confidence that the certified products have been created through environmentally friendly processes and can, therefore, be utilized without concern.
As for the social aspect, SCG places importance on the welfare of every single staff member throughout the duration of their employment with the company as well as the development of neighboring communities by participating in brainstorming and problem solving so that the communities and the company can achieve mutual growth sustainably. In terms of governance, SCG prioritizes transparency, fairness, and ethics. All of the aforementioned approaches stand on the basis of balancing profit with sustainability.
Conducting business with awareness of the environment, society, and governance in accordance with the ESG concept not only reflects the company’s responsibility towards society but should also be assessed in order to improve organizational efficiency and steer the company towards long-term sustainable growth.