ESG – it’s for everyone.

We are referring to how businesses use the three factors to evaluate their impact.

According to the CBI, two-thirds of investors take ESG factors into account when investing in a company. So ESG has the potential to develop your business finances while benefiting the environment and community. Making yourself attractive to investors is key when considering the governments Seed Enterprise Investment and Enterprise Investment Schemes (link to Ashcroft Insight article) – both of which provide tax relief for the investor. Indeed, ESG activities and commitment can also have a long term value of your business if and when you decide to exit (sell).

Regardless of whether you are looking for inward investment or not, adopting an ESG framework or attitude has other benefits such as reducing risk, lowering costs, improving reputation, and attracting new customers and employees.

The expectations of financial services organisations are changing fast. Profit and turnover cannot be the only measures of success – environmental, social and governance principles should be observed and taken into consideration to satisfy a broad range of stakeholders.

Stakeholders are now increasingly evaluating companies beyond short-term profits, with emphasis on ESG factors. How successful the ESG framework is will have a potential material impact on organisations short- and long- term value, so are increasingly important as companies emphasise equitable and inclusive long-term value creation. It matters because it provides stakeholders and investors with the ability to direct their capital to investments that are aligned to sustainable activities and investors own principles and values.

ESG compliance for financial services firms is a regulated activity. There are several standards organisations and regulators, including Prudential Regulation Authority and Financial Conduct Authority. Reporting framework information here. 

The benefits received by SME’s are also applicable to large businesses, these days many potential employees will review a company’s CSR commitment, their ESG report and ask some tough questions as part of their own research and if they are looking into this, they will have high expectations.

As a more complex organisation adopting an ESG strategy must be done on a much larger scale that will potentially include a multilocation and/or multinational approach. To be successful a scaled-up audit of current social and environmental impacts would need to be undertaken so that ESG activities have any chance of success.

ESG and corporate performance are fundamentally linked. Recent research* has reliably identified that firms that perform strongly across all three factors of ESG outperform the market and generate longer-term value.

ESG reporting is the mechanism to hold institutions accountable for their operations and the driving force for positive change that aligns to frameworks such as the UN Sustainable Development Goals. Businesses that perform strongly across the ESG factors become more resilient to emerging issues and more stable.

Some of our private clients have elected to invest exclusively in ESG compliant companies and have worked in senior positions that enabled them to instigate real change that resulted in incredible and sustainable growth. Many people are now looking to their social conscience to guide their financial decisions and we are experts in applying tax legislation to support this.As an SME we look to make efforts to be ESG compliant. Taking account of the three factors here is what we are doing:

Environment
We have committed to being a Carbon Neutral business by 2027. Working with Planet Positive who will measure Ashcroft’s carbon footprint over 2022-23, we will devise a plan to reduce it further and to offset usage to achieve this goal. Part of our measures include hybrid working to reduce commuter miles, the use of solar panels to offset energy use, low energy lighting and using a green energy provider.

Social
In addition, we have invested in employee welfare with our Wellbeing programme that encourages staff to take breaks and be active, such as access to a Pelton bike onsite, go for walks in the nearby meadows, to take an annual paid volunteer day and a paid birthday day off. We provide mindfulness opportunities such as jigsaws, colouring books, pilates sessions and a monthly massage. We also sponsor local grassroots sports teams, charities and match employee’s charity fundraising efforts.

In an effort to be involved with our local community we provide pro bono advice and accountancy to selected local charities.

Governance
As a chartered accountancy firm, we are bound by the regulations set out by the ICAEW. This means we are held to a very high set of ethical standards. We live and breathe anti-money laundering due diligence and tax legislation, and we help our clients remain compliant.