ESG is often mistaken as being only about the environment, but in reality it is about the sustainability of doing business within the environment, society, and the rules of the game. The topic is shifting from abstract promises to data: companies are expected to identify non-financial risks and show how they manage them. It is not only an obligation, but also an opportunity to secure financing, talent, and an edge.
ESG without myths: three pillars and the “G” in practice
ESG brings together the environmental, social, and governance pillars, translating sustainability into measurable indicators. The essence is simple: it is about managing non-financial risks and the cost of inaction. It’s neatly captured by the phrase, “ESG is sustainability translated into Excel.” For a business to endure, it must operate in harmony with the environment, people, and the rules.
European Sustainability Reporting Standards (ESRS) break down concrete topics and requirements under each letter. In “G”, this includes, for example, anti-corruption policy, a code of ethics, whistleblowing channels, and payment discipline toward partners. Many companies already do some of these things; they just don’t have them systematically documented. When they have the data in one place, they can set realistic goals and improve.
Why it matters: finance and supply chains
Banks increasingly monitor how financed projects affect the environment and reputational risks. If a project has a problematic profile, that can mean a higher interest rate or less interest from the bank. That’s why even smaller companies, when applying for a loan, face questions about their carbon footprint and improvement plans. ESG is therefore directly linked to the ability to finance the business.
Large companies in supply chains are likewise tightening requirements, demanding data from subcontractors for their reporting. The pressure is not only coming from Europe; the topic resonates globally, from the Middle East to the USA. And it’s not just paperwork: good data help prevent risks, streamline processes, and retain the best people. ESG thus turns into a competitive advantage.
How to get started: mapping, data, priorities
Start with a self-assessment and the collection of available information across the company. Sector questionnaires and platforms can generate relevant questions; if you have the data, basic mapping takes only tens of minutes. Without a baseline, you can’t set targets, and preparing a sustainability report takes roughly two to nine months. You should also factor in that, in addition to a consultant, internal people from multiple departments will need to collaborate.
The reporting obligation applies to companies that meet two of three conditions: 250+ employees, turnover of 50 million euros, or assets of 25 million euros. Priorities depend on the type of business; manufacturers address direct impacts, while service companies focus more on energy in leased premises, vehicles, or IT. In some cases, it makes sense to push the building’s landlord (e.g., photovoltaics, heat pumps) or find a partner who can help improve your impact. Collaboration with social enterprises can also help, strengthening the local community and potentially improving your ESG score.
