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The QCA recently released its Practical Guide to ESG.

The Guide gives an overview of what is becoming increasingly expected of all listed companies, including, small and mid-sized quoted companies by investors and other stakeholders, including increasingly regulators and policymakers.

Good companies have long known that their sustained success is dependent upon the health of their relationships with key stakeholders – not least their employees and customers. In the same vein, successful companies have recognised that they have impacts on their communities and the broader environment, and in turn both have impacts on the business.

If your company is still very early in developing its approach to key Environmental, Social and Governance (ESG) issues then my message to you is very simple – start right now and be confident and proactive in telling your story. You likely have a lot to say even though you may have not packaged it yet as “ESG”.

The Guide details steps that your company can take to increasingly develop your ESG proposition and get on top of standards, ratings, metrics, and regulatory requirements coming down the line. The initial step however, is very simple – put some slides in your investor deck and get talking.

The conversations stimulated by this will lead you to where you need to focus your energy. Data gathering and the rest will then follow.

We understand that for smaller companies this can seem like a daunting prospect and an additional distraction from running your business. It should however, complement it. Focusing on and measuring those things that matter makes good business sense and will support employee and customer engagement.

Whilst there are regulatory and other risks from doing nothing, there are also opportunities. Further to furthering your appeal to potential employees, suppliers and customers, is the opportunity to have greater appeal to genuinely long-term investors – both institutional and retail. Telling (and evidencing) the story you are proud of and making the link between your performance on these “non-financial” and your long-term strategy can and should be a win-win.

The QCA ESG Guide is free to all QCA members and can be downloaded here.

Will Pomroy,

Chair, QCA Corporate Governance Expert Group.

Director – Engagement, Federated Hermes.

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