Market forces, social concerns, and environmental realities are putting more and more pressure on businesses to shift toward sustainability. ESG (Environment, Social and Governance) standards are a path for businesses to make that shift.
The Business Development Bank of Canada (BDC) is committed to helping entrepreneurs rise to meet today’s economic, social and environmental challenges. Call it enlightened self-interest. In doing so, BDC also wants to help businesses improve their bottom line, attract and retain talent, and have a positive community impact.
How do they know where businesses stand on these issues? BDC recently released a survey of more than 100 major businesses in both the private and public sector, and the results were revealing. Over 75 per cent of Canadian suppliers consider ESG to be beneficial to their business. Around the world, the ESG reporting rate for large companies has risen dramatically, from 18 per cent in 2002 to 79 per cent in 2022. Increasingly, companies are requiring ESG standards from their suppliers, a practice called responsible procurement.
The three letters of ESG represent the pillars of sustainable business practices:
Environmental: Greenhouse gas reduction, by means of clean energy, transportation efficiency, and waste and water reduction.
Social: Diversity, equity and inclusion practices, community investments and employee volunteer programs.
Governance: Business policies and procedures that reflect sustainable practices, both environment and social.
One real-world, local example is DeeBee’s Organics. Dionne Laslo-Baker, the Victoria-based owner of DeeBee’s, is recognized as an ESG pioneer in BDC’s study. “My goalpost from the beginning was to be proud to tell my children this is how I built the company. It was my North Star.”
Her award-winning practices include supporting charities and initiatives like salmon restoration, LGBTQ+ organizations, and an orphanage in Honduras. Other DeeBee’s initiatives include solar-powered factories, composting food waste, reusing rainwater and offering employees stock options. DeeBee’s has seen an extraordinary 100 per cent annual sales growth since being founded in 2013, and its organic fruit snacks are now sold in 15,000 retail stores across North America.
BDC expects that within a few years, more than 90 per cent of Canadian businesses will be more like DeeBee’s. Their message is that ESG isn’t just good for the planet, it’s also good for business.