Hot summers, melting glaciers and devastating forest fires in Australia and Europe. Climate change has a noticeable impact on our world. Therefore, in the future, all companies must meet the expectations for sustainability and social responsibility. This requires information and technology. The ESG system helps companies in this.
But what is ESG? This is the English abbreviation The words Environment, Social and Governance it consists of its first letter - i.e. environmental, social and corporate governance criteria. The report provides information on the extent to which a company demonstrates environmentally and climate-friendly behavior, how well it complies with aspects such as occupational health and safety, or what management and control processes it uses, i.e. it makes the work done for sustainability visible and measurable .
Nowadays, activities affecting the environment, society and corporate governance growing both in size and influence, as businesses make serious efforts to become more sustainable and green. Negative effects on the environment in order to reduce this, not only company managers, but also investors and customers are increasingly looking for sustainable directions. We examined why solar energy is an effective ESG solution.
Environmental pillar of ESG
One of the biggest advantages of solar energy is that it has a tangible and immediate effect. We utilize the sun's energy through a solar panel system designed for this use. When sunlight hits these panels, they generate electricity through a not-so-complicated system. This means that the minute the solar panel system is commissioned, it is generating electricity on site and thereby reducing direct greenhouse gas emissions from resources owned by the company. In essence, the produced solar energy reduces the amount of utility electricity needed to power the facilities, and thus also reduces the companies' energy dependence. Overall, solar power is a low-cost, clean energy source that offsets corporate utility consumption immediately after installation. Moreover, since companies have to pay for annual carbon dioxide emissions, this also encourages company managers to switch to climate-friendly, energy-efficient production and energy consumption, and one of the fastest and most cost-effective ways to do this is to use solar energy.
The economic importance
In addition to the environmental effects, it is important to talk about the costs as well, since the solar panel system reduces the utility bill by providing an environmentally friendly and low-cost power source for businesses. Nowadays, the procurement costs of renewable technologies have decreased significantly. In addition to being a very cost-effective renewable energy source, the use of solar energy is very easy to implement, as it only requires free space. In addition, it involves low maintenance, which means that solar panels can provide decades of low-cost energy without significant extra expenses. This allows almost all types of businesses to consider this option.
What are the additional advantages of ESG opportunities:
- Customers, especially in B2C, prefer to buy sustainable products. Today, in many cases, customers place sustainability criteria at the center of their decisions. Some factors are very important in this context. For example, regional production, low CO2 footprint, organic origin.
- The sustainability criteria become part of the tender processes, so it is often not only important who makes the best offer, but also compliance with the green clauses.
- Companies involved in the supply chain of the products are also scrutinized to see who they contract with. After all, if the 80% of climate-damaging greenhouse gases is not produced by the company itself, but by a member of the supply chain, it also casts a bad light on the parent company. In order to make a product greener, companies look for environmentally friendly suppliers.
- Insurers raise premiums as a result of environmental risks, and this is not economically beneficial for companies. Financial service providers and insurers are already excluding entire sectors or incentivizing them to withdraw from climate-damaging activities. It is a clear advantage that climate-friendly companies receive faster and better terms from banks and investors.
- Renewable energy sources are becoming cheaper. Whereas fossil fuels are subject to strong price fluctuations and are increasingly subject to taxes and levies. Solar energy is already one of the cheapest forms of energy production.
Sustainable farming is not only a matter of moral attitude, but also a competitive advantage from an economic point of view! Those who operate sustainably not only do something to preserve our planet, but can run a successful business in the long term.
The social impact of the solar system
The number of people working in the renewable energy industry is constantly increasing, most employees are active in companies that install solar panel systems. Worldwide, this sector is the fastest growing and provides more than a third of jobs. Because not only solar panel installation is attractive as an industry, 2.4 million people each work in the field of hydropower and biofuels, but 1.3 million people are also employed in the field of wind energy.
The regional distribution shows a clear fluctuation. Almost two-thirds of the jobs are in Asia. China, for example, is a leading manufacturer of solar systems and is installing more and more offshore wind farms, creating jobs. Europe, on the other hand, is the most important exporter of wind turbines, 40 percent of the wind turbines installed worldwide are produced here. Africa's role is unfortunately still limited. And Brazil maintains its leading position, which means the important role of biofuels in the sector. The United States is starting to build a domestic industrial base based on the booming offshore wind sector.
Furthermore, a group of employees who want to work for a sustainable company is increasingly starting to form. This generation increasingly appreciates meaningful work that does not contribute to further warming of the planet. Therefore, we can safely say that sustainable businesses have a clear advantage in the competition for skilled and committed employees. But they also expect green, environmentally friendly working conditions, because the focus is increasingly on the quality of workplaces and good working conditions.
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