ESG, shorthand for Environmental, Social, and Governance, is now among the top aspects that help determine the success of modern businesses. This is because it is essentially a framework that allows stakeholders to understand how organisations manage the risks and opportunities related to the three pillars ESG stands for.
ESG: Beyond just environmental issues
While it may seem like ESG is just a fancy term for sustainability, it goes a step further as it takes a more holistic view that extends beyond just environmental issues. It is the proactive movement that has evolved from its reactive predecessors, such as CSR (Corporate Social Responsibility) and EHS (Environmental, Health, & Safety), and also includes key elements around social impact and governance structures and how they can be amended to maximise the well-being of stakeholders.
The ESG framework went mainstream when it became an integral part of the playbooks of many institutional investors. With it came the increase of ESG rating agencies that assign businesses with ESG scores. These scores determine whether an organisation is restricted access to capital (or dealt with less favourable terms) or rewarded for their good performance against ESG factors.
As such, many ESG investment vehicles like mutual funds, green bonds, index funds, and ETFs have emerged, making it simpler for investors to align their investments more closely to their values and beliefs around E, S, or G factors. And so, with all that said, how does ESG tie in with the coworking approach to work?
How coworking contributes to the ESG strategy
Coworking is a working arrangement that generally takes place in an office-like environment where professionals from all backgrounds, industries, and positions work alongside one another despite having disparate career paths. This can take on a smaller scale where individual employees and freelancers work under the same roof to a bigger one that involves entire teams or even departments.
Coworking contributes to the ESG strategy mainly in their environmental and social efforts;
- Environmental factor
For starters, the environmental factor of ESG includes everything around an organisation’s commitment to sustainability and its impact on the environment, including energy usage, carbon emissions and footprint, waste, and environmental responsibility. Coworking contributes in the environmental sustainability aspect with its goal of maximising real estate for work purposes that encourages sharing office environments instead of opting for the traditional approach of developing new land, which can often be environmentally harmful.
In addition, coworking branches are mainly located nearer to residential areas, promoting members to take alternative ways of commuting via walking or biking to reduce their emissions which ultimately reflects on their organisation. Lastly, coworking spaces heavily prioritise energy efficiency, using resources like natural lighting and indoor plants as much as possible to save energy and boost air quality that promotes the well-being of its members.
- Social factor
The social aspect of ESG covers an organisation’s internal workplace culture and conditions, employee satisfaction, diversity, retention, health, and safety. Companies with a high or good ESG score naturally exhibit a strong commitment to their employees, ensuring a commitment to equity and diversity, fair workplace practices, and fostering an environment that welcomes all and makes them feel accepted. This also includes ensuring safe and hygienic workplace conditions, employee benefits and a strong focus on the overall well-being of the workforce. Organisations that retain healthy and happy employees generally perform better and are viewed by investors as a stronger investment.
Besides providing a clean and optimal working environment, coworking also plays a part in this social aspect with its modern office setting that allows for some much-sought-after flexibility where companies can practise workplace inclusivity. For instance, the open concept of a coworking space permits businesses to carry out inclusive hiring, what with the coworking community having always been an open, welcoming space for individuals from all walks of life. In essence, the workplace inclusion through use and membership of co-working spaces can prove an advantage to companies in the social aspect of the ESG, since coworking spaces naturally emits a welcoming environment for all.
Touching on coworking spaces’ environment, these spaces provide the perfect conditions for businesses to collaborate with other companies to execute corporate social responsibility (CSR) together to create a larger impact. This is especially beneficial for small and one-person businesses, apart from other benefits that coworking spaces bring, such as saving small businesses amid the prices surging due to inflation. Though CSR and the ESG framework are not the same, both concepts still fall under the same sustainability umbrella, which essentially covers the social aspect of the ESG altogether.
With the growing importance of ESG in today’s turbulent climate and economic landscape, businesses are drawing on a range of tactics, strategies, and ESG solutions to achieve high ratings that will facilitate their growth and success. Coworking can be a worthwhile addition towards this goal as it significantly overlaps with the goals of ESG and affects multiple aspects of the framework as outlined above.
Therefore, if your organisation is looking to adopt coworking today, look no further than GreenHub Singapore! We provide modern and green office spaces for lease featuring natural lighting and biophilic design proven to promote productivity and mental wellness among employees. To experience our spaces for yourself, don’t hesitate to contact us today.