In this, the second in our ‘Investing in tomorrow’ series of reports, we continue to look at the challenges and opportunities presented by the increasing pressure on organisations across all sectors to address Environmental, Social and Governance (ESG) issues.

It is thought the term ‘ESG’ was first coined at a conference in 2005, but while it may be a 21st century acronym, the concept of ESG is far from new. For decades, indeed centuries, pioneering organisations have been trying to do good and endeavouring to tackle the ills of society. The difference now is that it is not only the pioneering organisations and cash-rich global and national conglomerates who need to consider ESG issues, but every organisation, whatever their size and position in the supply chain.

When it comes to ESG, actions can take many forms and there is no ‘one size fits all’ approach. What might, for example, be appropriate for a large multi-national company may be wholly inappropriate for a small to medium size business. Organisations also face ESG from different starting points. It is therefore imperative to focus on materiality when identifying the issues an organisation has a responsibility to address and determining the approach the organisation should adopt to make a meaningful difference.

Another theme arising from our conversations with stakeholders and commentators in the ESG arena is the importance of avoiding the pitfall of focussing on one aspect of ESG at the expense of the other two. More often than not issues are interrelated and to focus on a particular ‘E’, ‘S’ or ‘G’ issue in isolation runs the risk of unintended consequences. Awareness needs to be raised that ESG issues cannot each be considered in isolation, but must be considered together.

And the reference to ‘together’ brings me nicely on to the importance of collaboration. Success across many ESG ambitions is likely to be accelerated if there is a collaborative, joined up approach, whether this be via a large corporate helping the small businesses in its supply chain or, by way of example, collaboration between developers, occupiers and other stakeholders such as local authorities to create sustainable cities.

I hope this report provides information, ideas and inspiration to organisations to act, whatever the size or nature of your business and whatever point on the ESG journey you are on.

James Wood-Robertson, Partner and head of the energy and infrastructure sector