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Framing ESG: Shareholders' Benefits
A brief understanding on the practices of Environmental, Social, and Corporate governance.
In Brief: ESG— at first glance is a daunting term but is understood with respect to the corporate applications in economic strategy. ESG is an emerging framework within ownership and the corporate world trying to solve the great issues found within corporate structures to create practical efforts for the greater
ESG stands for Environmental, Social, and Corporate governance.
ESG is a framework designed to be embedded into an organization's strategy that considers the needs and ways to generate value for all organizational stakeholders like the employees, customers, and suppliers.
Why It Matters: Pete Stavros, KKR’s Co-Head of U.S. Private Equity, discusses his journey in the field of ESG and how external influences impacted him— such as books and individuals— that impact others. One question Stavros addresses is ‘why the movement for broad worker ownership is good for just about everyone’ — even if its myriad of implementational challenges can be daunting.
According to Stavros:
ESG takes a significant amount of time and effort to implement and practice.
Ownership Works is trying to unravel: How can we help companies do this more efficiently and effectively?
Because of ESG, Workers are not quitting as frequently, and limiting heavy turnover due to an increase in employee happiness.
ESG allows companies to have a more stable workforce as a result of this lack of turnover. “The company doesn’t have to hire 3,000 new people every year, which means less recruiting costs, less training costs, and smaller losses in productivity and knowledge since every year, the thousands of people who would be walking out of the door are staying put” (Stavros).
ESG, according to Stavros, is a strategy to support top leaders and other employees so as to encourage happiness and have an understanding and unprecedented access to what drives the leadership of those in the workplace.
Go Deeper: Read “The Fissured Workplace” by David Weil to get a deeper understanding of workplace dynamics and ESG-inspired processes by Stavros.
Image Credit: Getty Images
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