ESG – People over Profit

ESG… It’s taken a while to get my head around it to be honest.

How do you most effectively measure the impact your business has environmentally? What about the impact it has socially? How transparent and accountable is your business?

 And why should any business wrap these seemingly separate measurements all up into one ESG package?

I know our late father John Carr would have scoffed at the term, and while he was at it sent some gentle scoffing in my direction for good measure if I had asked his opinion. Not because of a fear of change, or a cynical or naïve outlook on modern business practices, but because he knew that for his generation of our family business, a lot of ESG best practice was already baked in.

 Over the last eight years or so, since I returned to Carrs Pasties, I’ve witnessed and implemented changes that were intended to increase productivity, sales, innovation and digitisation. All of the management courses I’d attended, the examples of best practice I had collected were not enough to effect a positive change every time – often causing stress within various departments and as leaders we experienced a fair degree of resistance from our people.

 Over time we’ve realised that these have been occasions when we were trying to crowbar in processes and practices we had seen implemented in other organisations instead of starting with our own well established values: Work as a Family; Fill Everything With Pride; Do The Right Thing. 

And so to ESG – Environmental and Social Governance – a relatively new phrase that shares common ground with CSR and before that, good old fashioned philanthropy.

Neil Davy, CEO of the IFB (Institute for Family Business) has some advice – as summed up by Tom McGuinness from KPMG who recently published some takeaways from a recent seminar given by Neil on their Beyond platform.

Tom said: “Where businesses are facing increasing pressure and scrutiny from external investors and being challenged to show their values and purpose, the family business’s longer-term focus on people over profit is a model that listed businesses should look to follow. As ESG ratings, scorecards and frameworks become a key differentiator for winning business, family businesses could have a competitive advantage – but some realignment may be needed in order to truly enable a narrative driven by purpose and values.”

And this, from last July, when speaking at a CBI event, Raymond Greaves, Head of Research at FinnCap Group advised that:

“…there are some key steps your company can take to get on the ESG ladder and will make you a better company from an investors point of view and future employees:

  • Obtain key environmental data points – energy consumption, CO2 production, water consumption and waste production.
  • Prepare and apply the most important policies – sustainability policy, discrimination policy, ethics policy and discrimination policy.
  • Address diversity in the boardroom.”

 I look at that list and realise that although there are quite a few items we are already getting on with, there are areas we can definitely improve on – for example the most obvious improvement: we need to address a diversity problem with the current leadership team.

Carrs has been led by second or third generation siblings for over fifty years so we need to work hard to increase diversity when recruiting future leaders to join us (NB. we are working with the brilliant duo Sue Howarth and Dave Clarkson from the Family Business Community to help us with this and a plethora of other things).

 If my dad was still with us, even the fact I’ve spent time typing this into LinkedIn would put him in gentle mocking mode once more – especially if I told him I have done it as part of a new marketing strategy.

 But I also know that, at the heart of the matter, Neil Davy and John Carr are in full agreement: focus on people before profit and you won’t go far wrong.

Published by Matt Carr, Head of Commercial at Carrs Pasties.