As the public becomes more concerned about ethical business tactics and the environmental and social impact that companies have, many global companies are under close scrutiny. These days, we should all be concerned about the sustainability of the businesses we support. But, how? It isn’t always easy to get a hold of quality-control measures and environmental impact statements; so, how are we able to hold companies accountable nowadays?
The answer lies within ESG reports. ESG reporting can help influence the way we see companies, demonstrating which are more sustainable than others. In terms of hemp businesses, in particular, ESG reporting may be key in demonstrating just how beneficial this industry could be for more than just financial reasons.
What is ESG Reporting? Why Do it?
First, it’s important to understand what ESG reporting is and why companies do it. ESG stands for Environmental, Social, and Governance reporting, and these reports demonstrate a company’s impacts in those particular areas:
● Environmental: Analyzes a company’s impact on carbon emissions, climate change, deforestation, biodiversity, waste management, and more.
● Social: This looks at the company’s impact on human rights, customer satisfaction, gender and diversity, data protection, privacy, labor standards, and more.
● Governance: Analyzes the businesses impact on board composition, bribery, thievery, political contributions, whistleblower programs, and others.
For stakeholders, ESG reporting is crucial when determining the quality and value of a company compared to one another. These reports force global brands to be more transparent and open with their standards, as this is the information that draws in (or turns off) buyers and investors. Not only that, but having this information be readily available also entices brands to shoot for higher standards, always wanting to beat out their competitors.
Companies undergo ESG reporting to ensure they’re following proper standards and to show outsiders how reputable the brand and its values are. These tests also help measure how risky a company may be, as it can find faults, opportunities for growth, and other areas of improvement.
Essentially, an ESG report is going to have all the answers you need to the questions you have about a particular company’s socioeconomic and environmental impacts.
How ESG Reports Impact The Way We View Companies
ESG reports have directly impacted the way that everyday consumers view companies. Before this kind of elaborate reporting, investors and buyers were primarily left in the dark regarding these quality-control standards. Instead, it was left all up to trust and word of mouth, which, as we’ve learned, isn’t always the most effective. Thus, these reports give us solid, concrete evidence providing us the information we were most curious about.
Thanks to ESG reports, we can see how well a company holds up to its standards. While a business can promise one thing, ESG reports may reveal another. Thus, we’re able to see these companies for who they are, past just their marketing techniques. Instead, we have both quantitative and qualitative information to base judgements on. According to a study by Bank of America, 92% of Gen Z customers would switch to a company that supports ESG reporting. On that same note, 94% believe that it’s crucial for these businesses to address their ESG shortcomings.
It’s simply not an option anymore.
With ESG reporting, navigating investment risks and dedicating your time and money to better, more sustainable companies becomes easier than ever before. Finally, it’s like we have the inside scoop on business practices that we’ve always wanted — and needed.
ESG Reports and Holding The Hemp Industry Accountable
When it comes to the hemp industry in particular, ESG reports will hold serious value. These reports can help hemp farmers invest in more reputable, environmentally sound businesses that aren’t as much of a risk as others. These reports demonstrate firsthand how quality, transparent, and worthwhile a brand is for investment, and for small farmer owners, this can be the matter between making rent or not.
Theoretically, the hemp industry has incredible promise regarding its positive impacts on climate change and other environmental factors. However, not all brands will embrace this sustainability as much as others. Thus, ESG reports can help hold those business owners accountable, helping US farmers to invest in only the best options — both for them and the ground their plants grow on.
Right now, hemp is one of the most lucrative industries you can get involved in. But, with that comes various companies whose standards just aren’t where they should be. Taking a look at ESG reports keeps these businesses responsible for whatever promises they set in place. Not only is this beneficial for investors, but this means remarkable results for the socioeconomic and environmental impacts, as well.
Embracing Transparency With ESG Reports
Today, it’s more important than ever for consumers to be conscious about what they’re buying and where their products come from. The same goes for investors, too. That’s why ESG reporting is crucial in this day and age, as everyday people deserve access to information that directly impacts you and the world around you.
Here at National Hemp Association, we’re focused on helping US farmers get the financial help they need to grow and let their businesses flourish. We understand the impact that the hemp industry could have on the environment, and we’re dedicated to reversing the effects of climate change through our services. With ESG reporting, we’re able to better help match farmers with proper financial services and support, never working with companies whose ESG reports don’t meet our standards. As stated in his public presentations, NHA chair, Geoff Whaling, reminds that the return of hemp to our landscape presents a once in a generation opportunity, that “We must get right. Adoption and leading in ESG must be at the forefront of all our work with our members, stakeholders and, all Federal and State hemp policies and regulations.”
ESG reporting is an excellent way to better connect global companies with their investors and then, their customers. In a time where we all want to purchase from more sustainable, environmentally friendly options, having these reports allows us to make these more conscious, positive decisions. This way, we don’t have to be concerned about who we are supporting and where our goods and services come from. Instead, ESG reports outline all of this for us, leaving buyers and investors ready and confident about getting started.
~Written by NHA Volunteer Writer, Mell Green