There’s a lot of confusion over Environmental, Social, Governance, (ESG) and Corporate Social Responsibility (CSR). And many people wonder if they are the same? Well, to answer that question… Yes and No - same in some ways, but not in others. And, how does biodiversity fit in?
Corporate Social Responsibility (CSR) can be considered to be an internal tool that helps companies understand and think about developing a strategy around how they are performing in regards to social governance, and I use ‘social’ broadly here. …Meaning it can help companies understand how they are performing from a people and planet perspective.
But, hold on, isn’t that what ESG is?
Well, more recently there has been a shift in the language away from Corporate Social Responsibility (CSR) to Environmental, Social Governance (ESG).
This is partly down to the number of regulatory and reporting requirements that are being put in place. These ‘regulatory and reporting’ requirements fall under the ‘G,’ the governance part of ESG. The governance part asks that companies of a certain size, or turnover, or those that import goods into the European Union etc. disclose their ESG efforts.
ESG places more emphasis on external disclosure of the efforts a company makes with regard to sustainability. In short, ESG is more aligned with a company’s requirement to disclose the nature of their people and planet efforts. It pushes companies to be more open with what they’re doing. And, biodiversity falls under this.
But there’s more to this, part of the move of the away from Corporate Social Responsibility (CSR) is in the name itself. Particularly, the ‘Responsibility,’ part, which has negative connotations associated with it. Yes, it’s marketing at play here. Companies don’t want to upset their customers, or want their customers to think of them in a negative light. And talking about a 'responsibility' to the planet has negative connotations associated with it. They’d much rather we thought of them in a positive and proactive way, and using ESG helps with that.
Conclusion
There’s a lot of overlap between the two, but over the last few years we’ve seen a move towards ESG. It’s here to stay for a couple more years at least. I’m sure that at some point in the future the language will change, and we’ll move on from ESG so as to encompass new sustainability initiatives and trends but the the principles that underpin ESG are here to stay; to do good for people and planet, without compromising the future.
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