ESG is now essential for successful business as it enables companies to reduce risks, increase profitability, and enhance their reputation. By implementing an ESG strategy, companies not only contribute to sustainable development but also strengthen their long-term competitiveness. A good ESG strategy helps companies achieve better results and attract investors who value responsible business practices.
How can your company become a leader in ESG and set standards in its industry?
Start by analyzing the current situation and set SMART goals (Specific, Measurable, Achievable, Relevant, and Time-bound), such as reducing CO2 emissions by 20% by 2025. Integrate the ESG strategy with the core business strategy and actively engage all stakeholders, including employees and local communities. Regularly monitor progress using recognized methodologies like GRI and publish transparent annual reports.
Key ESG Components for Companies
ESG represents a new way of non-financial reporting on business.
- E – Environment
- S – Social (social responsibility)
- G – Governance
The components of an ESG strategy—environment, social responsibility, and governance—are the foundation for building sustainable business. Their implementation is not only a duty but also an opportunity for companies to improve operations, attract investors, and make a positive impact on the world.
ESG components are interconnected and function as a whole, enabling a comprehensive approach to sustainable business. For example, more efficient waste management (E) not only benefits the environment but also improves working conditions for employees (S) by creating a safer and healthier work environment. Such practices also reflect good governance (G), as they demonstrate management’s responsibility in implementing sustainable practices.
Environment (E)
The environmental perspective includes a comprehensive analysis of the company’s impact on the environment. This includes factors such as greenhouse gas emissions, use of hazardous chemicals, ecological impact of suppliers, adaptation to climate changes, water and waste management.
Example: Technology companies like Google are transitioning to 100% renewable energy sources for their data centers.

Social Responsibility (S)
The social aspect covers the impact of the company on the social environment, both within the organization and broadly. This includes caring for employee wellbeing, promoting diversity, providing communication channels, supporting education, and ensuring health and social security for employees.
Example: Unilever offers programs for the physical and mental health of employees, which has reduced sick leaves and increased productivity.
Governance (G)
The governance aspect deals with how management promotes positive changes within the company. This includes factors such as transparency, diversity in management structures, compliance with laws, and stakeholder relations.
Example: Danone has strict policies to prevent conflicts of interest and monitor compliance, ensuring ethical business practices.
Benefits of implementing an ESG strategy for companies
Implementing an ESG strategy brings numerous benefits for companies:
- Sustainable business: Focus on environment, people, and legality ensures long-term stability.
- Attracting and retaining top talent: ESG initiatives attract talent who value responsible business.
- Improved access to capital: Easier access to green loans and financing.
- Meeting business partner requirements: Customers increasingly demand sustainable practices.
- Meeting consumer expectations: Consumers prefer brands with responsible practices.
- Enhancing reputation: ESG builds trust among customers, investors, and employees.
- Fostering innovation: Companies like Unilever and Patagonia use ESG to create competitive advantages.
A clear and precise ESG strategy brings these advantages. These benefits are clearly reflected in the financial results, reputation, and operational efficiency of companies, while also ensuring long-term compliance with laws and regulatory frameworks. Through sustainable practices, companies can increase their competitiveness, attract investors who value responsible business, and build trust among all stakeholders.
Steps for Implementing an ESG Strategy

Implementing an ESG strategy requires timely preparation. The ESG strategy represents a crucial step towards sustainable business and long-term competitive advantage. It is advisable to start at least six months in advance to ensure a successful transition.
- The first step is to assess the current state through an internal analysis of the business’s impact on the environment and society, and compare it with industry leaders (benchmarking).
- Setting SMART goals: For example, reducing CO2 emissions by 20% by 2025 or increasing the proportion of women in leadership positions to 40%.
- Engaging with stakeholders: Cooperation with employees, suppliers, and the local community is key to involving all interested parties, while communication with investors further contributes to trust and support.
- Implementing specific measures: In implementing specific measures, companies can introduce green technologies and educate employees about ESG practices, making them more competitive. Positioning themselves in the market as a sustainable company further strengthens the brand.
- Monitoring progress: Ultimately, it is crucial to monitor progress. By using specialized tools and regularly publishing ESG reports in accordance with standards such as GRI, companies ensure transparency and compliance with investor and regulator requirements. Thus, ESG becomes not only an ethical but also a financially efficient strategy.
It is important to know that “green businesses” have access to more favorable loans and subsidies. This leads us to conclude that ESG is becoming not only an ethical but also a financially profitable strategy.
Common Mistakes in ESG Reporting and how to avoid them
ESG reporting is becoming increasingly important, but companies often face challenges and make errors in this process. Here are the most common errors in ESG reporting and ways to avoid them:
Unclear or Incomplete Criteria
- Mistake: Companies often do not use clear and standardized criteria for measuring and reporting on ESG factors, which complicates comparison and analysis.
- Solution: Use recognized standards and frameworks for ESG reporting, such as GRI (Global Reporting Initiative), SASB (Sustainability Accounting Standards Board), or TCFD (Task Force on Climate-related Financial Disclosures).
Lack of Transparency
- Mistake: Incomplete or misleading reports where companies do not disclose all relevant information or only show positive aspects.
- Solution: Be transparent about all ESG factors, including challenges and areas for improvement. This includes disclosing both positive and negative impacts.
Incomplete or Inaccurate Data
- Mistake: Using inaccurate or incomplete data can lead to incorrect conclusions and poor reputation.
- Solution: Implement reliable systems for data collection and verification to ensure accuracy and completeness of information. Regularly update and verify data sources.
Disconnection of ESG Factors from Business Strategy
- Mistake: Reporting on ESG factors without linking them to the company’s long-term business strategy can reduce their relevance.
- Solution: Integrate ESG factors into the overall business strategy and clearly demonstrate how they contribute to achieving business objectives.
Overly Complex Reports
- Mistake: Reports that are too long and complicated can deter readers and reduce their usability.
- Solution: Make reports concise and structured. Use simple language, graphic displays, and summaries for easier understanding.
Ignoring Key Stakeholders
- Mistake: Overlooking or insufficiently involving key stakeholders can lead to incomplete reporting and lack of trust.
- Solution: Involve all relevant stakeholders in the ESG reporting process. Gather their feedback and consider it when preparing the report.

Inconsistency
- Mistake: Reporting that changes in format and content from year to year makes comparison and monitoring of progress difficult.
- Solution: Use consistent methods and reporting formats to enable comparison over time.
Non-compliance with Regulatory Requirements
- Mistake: Ignoring local and international regulatory requirements can lead to fines and negative consequences.
- Solution: Familiarize yourself with all relevant regulatory requirements related to ESG reporting and ensure compliance.
Lack of Internal Expertise
- Mistake: Lack of expert staff who understand ESG factors and reporting can result in poorer quality reports.
- Solution: Invest in employee training and engage external experts as needed to assist with ESG reporting.
Insufficient Focus on Long-term Impacts
- Mistake: Focusing exclusively on short-term results while neglecting long-term goals and impacts of ESG factors.
- Solution: Report on both short-term and long-term goals and outcomes and clearly show progress towards sustainable objectives.
Avoiding these common errors can significantly improve the quality of ESG reporting and contribute to a better understanding and valuation of a company’s sustainable efforts.
Conclusion
Did you know? Unija is proud to be a pioneer in ESG efforts.
ESG is not just a trend, but a key strategy for sustainable and successful business in the future. By adopting ESG principles, companies not only strengthen their reputation and market position but also actively contribute to solving global environmental and social challenges. With the support of our expert team, ESG becomes a tool for creating competitive advantages and long-term business stability.
So, don’t wait – visit our ESG page and find out how we can help you! Our Unija Consulting professional team offers support at every step.
Need advice? Write to us at info@unija.com or contact us HERE.