Environmental, social, and governance (ESG) factors are becoming increasingly important for all businesses, including small businesses, to consider. As we enter 2024, there are several key ESG trends that small business owners should be aware of:

Sustainability Reporting

Regulators and investors are demanding more transparency from companies on their ESG policies and performance. Large corporations have been releasing sustainability reports for years, and now small businesses are starting to follow suit. In 2024, we expect sustainability reporting to become more mainstream for small companies as well. Tracking and disclosing your energy usage, carbon emissions, waste generation, and other metrics shows stakeholders you are managing your environmental impact.

Climate Risk Assessments

With climate change effects intensifying, small businesses need to evaluate how rising temperatures, extreme weather events, and related issues could impact their operations. Performing a climate risk assessment allows you to identify vulnerabilities and create resiliency plans. This is becoming an expected part of due diligence.

Renewable Energy Adoption

Transitioning to renewable energy sources like solar and wind is getting more affordable and accessible. Many small businesses can save money on utilities by installing rooftop solar panels or enrolling in community solar farm programs through their utility company. Using renewables reduces your carbon footprint and shows a commitment to sustainability.

Ethical Supply Chain Management

Consumers care more about where products come from and whether supply chains are ethical. Small businesses should closely monitor their suppliers’ labor practices, environmental impacts, and inclusion efforts. Seek out and collaborate with minority- and women-owned suppliers as part of a diverse, equitable, and environmentally-friendly supply chain.

DEI Policies and Practices

Diversity, equity, and inclusion (DEI) are now vital to attracting top talent and retaining employees. Develop thoughtful DEI policies that promote equitable hiring and promotion processes, harassment-free workplaces, flexible work arrangements, and employee resource groups. Make DEI a core part of your company culture.

ESG is here to stay and small businesses can benefit from getting ahead of trends. Reach out for help developing your 2024 ESG strategy.