Understanding ESG

Understanding an organisation’s ESG aspects provides an in-depth exploration of non-financial risks that may adversely affect organisational performance. Furthermore, considering the different ESG aspects enable value creation through, firstly, recognising the gaps that are present in their ESG business practices and, secondly, closing the gaps to maximise the value creating opportunities inherit in them.

While ESG aspects are typically referred to as non-financial elements, they can have a direct impact on the financial performance of an organisation. Stakeholders, from customers to investors, are increasingly making their decisions on the ESG aspects of an organisation. This has a direct financial impact on revenue and the cost of capital.

Studies have found that organisations with robust ESG practices are more likely to have a lower cost of capital, fewer accounts of corruption, and reduced volatility. In addition, those organisations that were found to have poor ESG practices were more likely to have a higher cost of capital and increased volatility due to disruptions along their supply chains, their operating environments and/or caused by extreme weather events, as well as possible liabilities, or legal compliance issues.

While it might be simple to understand the different ESG elements of organisations and the subsequent benefits, the process of identifying and benchmarking organisational practice against ESG best practices has previously been a costly, time-consuming process.

This time-consuming process has been optimised through a collaboration between Mazars and Kudos One. We have developed a simple but effective tool and thus, increased the accessibility for organisations to engage with their ESG practices.

Your Mazars ESG Awareness assessment will simplify the first steps into becoming a more sustainable organisation, while simultaneously analysing the risks and opportunities at the forefront of your business practices.

After the completion of an ESG Awareness assessment, we provide a report that discusses an organisation’s current awareness levels to ESG elements and the gaps in organisational practices. Additionally, pragmatic solutions are provided to close the relevant gaps while maximising value.

For more valuable insights and content regarding ESG, join us for our podcast series: ESG @ Mazars. Our first episode is out now. Listen in here

For further information, please feel free to reach out to our experts below or contact us on our dedicated email address: esg@mazars.co.za