Environmental, Social and Governance (ESG) and What it Means to You

One of the benefits of using recycled materials is that they can help companies improve their environmental, social, and governance (ESG) performance. ESG is a set of criteria that measure how a company operates in relation to its impact on the planet, people, and society. ESG factors are increasingly important for investors, customers, regulators, and other stakeholders who want to support businesses that are ethical and responsible.

By using recycled materials, companies can demonstrate their commitment to environmental sustainability and reduce their carbon footprint. Recycled materials also have social and governance implications, as they can create new opportunities for local communities, support fair labor practices, and enhance transparency and accountability. Using recycled materials can help companies achieve higher ESG scores and gain a competitive edge in the market.

One recent study from Deloitte has shown the “ESG-driven value premium” is real. Generally, if you have two companies that are otherwise equal, and one of the companies has more focus and results around the ESG topic, it will increase their valuation as it relates to the EV/EBITDA multiple. Participating in ESG initiatives is much more than a feel good initiative. It is a way to increase the value of your company!