In today’s digital world, making sure websites and online content are accessible is really important for businesses and organizations. People with disabilities rely on digital tools to do lots of things, so accessibility matters a lot.
But it’s not just about being nice – digital accessibility also affects how investors and stakeholders rate a company’s sustainability and ethics. These ratings, called Environmental, Social, and Governance (ESG) scores, are super important for investors.
In this blog post, we’ll talk about why digital accessibility is such a big deal for ESG scores and how it impacts businesses. We’ll look at why companies should make it a priority and the benefits that come with doing so.
What are the ESG Principles?
Lately, there’s been more talk about corporate social responsibility (CSR) and ethical business practices. One important part of CSR is ESG scores.
ESG, which stands for Environmental, Social, and Governance, is a way to measure how sustainable and ethical a company is. It looks at things like its impact on the environment, how it treats its workers, its governance structure, and its relationships with communities.
The ESG framework is used by investors, stakeholders, and organizations to get a sense of how well a company is doing in these three areas:
1. Environmental Impact
This section examines how a company affects the environment, considering factors such as its use of natural resources, energy consumption, greenhouse gas emissions, waste management, and efforts to reduce pollution.
2. Social Responsibility
This section evaluates how a company interacts with society, including its relationships with employees, customers, suppliers, and the communities it operates in. It also looks at initiatives like community engagement, philanthropy, and commitments to social responsibility.
3. Governance Structure
This section looks at how a company is run internally, including its leadership, board of directors, and management practices. It also considers the company’s approach to risk management and its compliance with laws, regulations, and industry standards.
Benefits of ESG Principles
1. Competitive Advantage
Companies involved in ESG efforts often gain an edge over their competitors. For example, a survey conducted in 2022 by GreenPrint, a sustainability tools provider now owned by PDI Technologies, found that 66% of respondents were willing to pay extra for environmentally friendly products. Similarly, a 2022 survey by TechTarget’s Enterprise Strategy Group division found that 70% of IT professionals would pay more for IT products from vendors with strong ESG practices.
ESG metrics reported by companies are important to consumers, employees, lenders, and regulators. Companies that prioritize labor conditions, diversity, community involvement, and socioeconomic issues strengthen their brand.
2. Attracting Investors and Lenders
ESG reporting in earnings reports or separate disclosures is becoming more common. Investors and lenders are attracted to organizations that prioritize ESG and use disclosures to highlight their sustainability efforts. In 2022, a Gallup study found that nearly half (48%) of investors are interested in sustainable investing funds. This trend aligns with a Dow Jones survey that same year, which projected ESG investments to more than double in just three years.
ESG metrics reported by companies are important to consumers, employees, lenders, and regulators. Companies that prioritize labor conditions, diversity, community involvement, and socioeconomic issues strengthen their brand.
3. Boosts Financial Performance
Integrating Environmental, Social, and Governance (ESG) practices doesn’t just attract investors—it also improves a company’s financial health. Even small sustainability efforts, like going paperless or recycling, can positively affect a company’s profits and return on investment (ROI).
To implement ESG initiatives effectively, companies should track important metrics like energy usage, resource consumption, and waste management. These efforts can lead to lower energy bills and operational costs over time. Plus, sticking to ESG regulations helps companies avoid fines and penalties, which protects their financial stability.
For example, in 2020, Nestlé committed to investing up to $2.1 billion by 2025 to switch from traditional plastics to recycled materials. This move is expected to reduce Nestlé’s carbon footprint and save on compliance costs, especially in regions with strict plastic usage laws.
4. Builds Customer Loyalty
The COVID-19 pandemic has changed consumer habits, with 50% of respondents in a 2021 Accenture survey saying they’ve shifted their shopping priorities. These consumers are willing to pay more for brands that share their values and prioritize social responsibility. Today’s shoppers want to support businesses that give back to society.
Companies that prioritize ESG principles can earn stronger customer loyalty by being open about their sustainability efforts. By showing a genuine commitment to environmental and social causes, businesses can attract and keep customers who appreciate ethical practices and community involvement.
5. Encouraging Sustainable Practices
Companies that invest in ESG (Environmental, Social, and Governance) initiatives can ensure they’re prepared for the future. By integrating ESG principles into their operations, businesses can find ways to save money, reduce energy use, cut down on waste, and lower costs overall.
While ESG reporting is only required for publicly traded companies in some places right now, it’s becoming more common across all kinds of businesses. Those who don’t pay attention to ESG now might face problems down the line, like legal issues or damage to their reputation.
How Does ESG Relate to Accessibility?
ESG, or Environmental, Social, and Governance criteria, summarizes the various efforts organizations make to fulfill their commitments to society and the environment. It’s become important for investors evaluating potential investments and serves as a key metric for company leaders to track and communicate the progress of socially responsible initiatives and policies.
In simpler terms, ESG and accessibility are closely connected. Making things accessible helps companies promote social inclusivity and diversity, which are crucial for building a positive reputation and keeping customers loyal to them.
Accessibility mainly falls under the “Social” part of ESG, which focuses on an organization’s efforts towards diversity, equity, and inclusion (DEI), both externally with customers and internally among employees. Accessibility is part of this because it’s about people—it’s about making sure that physical and digital environments, products, services, and information can be used by everyone, including people with disabilities, whether they’re permanent or temporary. In fact, accessibility is so tied to DEI that many, including President Biden, now use the term DEIA to emphasize that these initiatives can’t succeed without considering the needs and perspectives of people with disabilities.
Why Prioritize Accessibility in Your ESG Strategy?
Here’s how prioritizing accessibility strengthens your Environmental, Social, and Governance (ESG) strategy:
1. Be an Inclusive Leader: By making your products, services, and website accessible to everyone, you show you care about diversity and reaching a wider audience.
2. Build a Loyal Customer Base: People appreciate companies that go the extra mile for accessibility. You’ll earn their trust and keep them coming back.
3. Reach a Huge Market: There are over 1 billion people with disabilities worldwide, with significant spending power. Accessibility opens doors to this untapped market.
4. Attract Top Talent: The best people want to work for companies with strong social values. Prioritizing accessibility shows you’re a responsible employer.
5. Avoid Legal Headaches: Be proactive! Accessibility lawsuits are on the rise. Taking steps now saves you money and hassle down the road.
6. Make Things Easier for Everyone: Accessible design principles create clear and user-friendly experiences for all, not just people with disabilities.
7. Build for the Future: Investing in accessibility from the start is cost-effective in the long run. You won’t need expensive changes later.
Closing Thoughts
In today’s digital world, accessibility isn’t just about being nice – it’s a key factor in how your business is perceived. By making your website and content accessible, you’re not only promoting social inclusion, but also boosting your ESG score, a metric increasingly important to investors and stakeholders. This focus on accessibility demonstrates your commitment to social responsibility, opens doors to a vast untapped market, and strengthens your brand reputation. Ultimately, prioritizing accessibility is a win for society and a win for your business.
