ENTOUCH Smart Building Solutions

What Is ESG and Why Is It Important?

Today’s consumers are informed. They have more information than any other generation in history. They will evaluate your brand well before they ever step into an actual brick and mortar facility. In addition, they can review your business’s social history and energy use habits in an instant. They may opt to review past customers’ experiences on social media, and watchdog groups consistently publish the latest details for an individual company’s sustainability measures. In a sense, this is why more companies are starting to recognize the environmental, social, and governance (ESG) implications of their operations and what ESG can mean to brand image. First, Facilities Managers must be able to answer the crucial questions — what is ESG and what does it mean to their overall operations and the company’s brand?

Challenges Driving the Need for Better Risk Management

The challenges of facilities management are wide-ranging and impact profitability in many ways. Inadequate facility and energy management results in higher overhead expenses, contributing to higher costs to consumers. Higher energy use may lead to a more significant carbon footprint for buildings, and inefficient processes will eventually come under the microscope. Unfortunately, the challenges only grow worse from there.

Failure to consider the environment will inevitably lead to the possible assessment of penalties and fines by future administrations. While the “Green New Deal” is on the table politically, it is not likely to pass this year or during this administration. However, the arc of history reveals that increasing regulations are likely, despite ongoing efforts to deregulate energy utility providers.

What Is ESG in Facilities Management?

ESG in facilities management is a relatively simple concept. Facilities Managers must consider the various ways their organizations may impact others. Specifically, how will continued operations impact the environment? If current operations continue, how will they impact consumers and the business’s social media presence? Finally, if left unchecked, how will governments of all sizes view current operations, explains Harvard Law School. In some cases, failure to consider this final point may leave money on the table.

For example, failure to explore all governing possibilities may mean overlooking incentive programs designed to help a business pay for the upfront cost of energy efficiency upgrades and improvements.

Tips for Applying ESG in Management Decisions

Facilities Managers who recognize the impact of ESG and are developing targeted strategies should follow these tips fully:

  1. Review local, state, and federal regulations/guidelines for sustainability requirements or recommendations. Reviewing regulations includes both the socially responsible incentives and potential fines that may be assessed for failures.
  2. Work with customers to understand their expectations. Customers will make their voices heard, and Facilities Managers can get ahead of the trend by reaching out to understand and connect with customers, which may include creating ways for customers to give feedback in a private manner, such as the surveys commonly seen on receipts.
  3. Find and eliminate resource waste. Retrofitting facility assets with wireless sensors is an excellent way to understand resource use or misuse. After locating issues, make meaningful improvements that reduce its incidence.
  4. Track the right energy metrics. Energy metrics track information, but Facilities Managers should also work to develop key performance indicators (KPIs) and use dashboards to recognize when metrics drift out of prescribed lanes.
  5. Measure performance after the change. Even after making changes, managers should continuously review KPIs, adjusting settings, and processes to account for external and internal influences.
  6. Leverage new technology to drive resource avoidance. New technologies continue to arise, and deploying the latest technology will reduce risk and offer opportunities in facilities management.

Choose an Established ESG-Inclusive Energy Management Partner

When someone asks, “What is ESG,” your facility team can be prepared and know they are hinting at the intensive ways an organization may affect the planet. In a way, it is all about sustainability. Ensure your organization understands ESG, sets goals that align with ESG concerns and continuously works to refine your operations to lower your facilities spend, as well as make conscious efforts to preserve the earth’s natural resources.

Learn more about how ESG can boost your facilities’ performance by visiting ENTOUCH online or calling 1-800-820-3511.