What are inner CSR and ESG activities?

CSR (Corporate Social Responsibility) is becoming not just a fashion, but an important part of business culture for an increasing number of European companies. Responsible business is a concept where organisations voluntarily integrate social and environmental interests into their business operations and in their dealings with stakeholders (including employees, customers, suppliers, shareholders and the local community) as early as the strategy-building stage. Companies implementing a responsible business programme usually enjoy a good reputation and great market acceptance, as CSR policy is a testimony to the conscious, holistic action of entrepreneurs who – in addition to their own interests – also take into account global problems, the needs of employees and the well-being of the environment. Responsible business is not a cost, but an investment: in human resources, in environmental protection and in shaping the attitudes of contractors. The primary objective here is to achieve a balance between the company’s efficiency and profitability and the interests of society.

Sustainability initiatives that companies can undertake as part of CSR include using sustainable resources, sponsoring local events, providing financial benefits or assistance, offering educational materials or free educational services to developing countries or local communities, philanthropic programmes or any CSR activity that increases productivity.

Corporate Social Responsibility (CSR) is considered as the activity of a company to enhance corporate image and reputation. In contrast, ESG pursues corporate sustainability based on environmental, social, and governance themes. The evaluation of corporate non-financial performance and investment are the most important factors.

Environmental, Social, and Governance (ESG) is a framework designed to enable organizations and countries to assess how far they are with their sustainability goals. It is a collection of non-financial factors that evaluates the robustness of an organisation’s governance mechanism and its competence to effectively manage its environmental and social impacts. The goal of ESG is to encapsulate all the non-financial risks and opportunities immanent to a company’s day-to-day activities. Investors are increasingly using these non-financial factors as part of their analysis procedure to identify material risks and growth opportunities.

A conscious and effective ESG policy, therefore, has become a priority for many fashion brands and is becoming increasingly important for shareholders, investors, and customers.

ESG considers three pillars:

Environmental: Energy efficiencies, carbon footprints, greenhouse gas emissions, deforestation, biodiversity, climate change and pollution mitigation, waste management and water usage

Social: labour standards, wages and benefits, diversity and inclusion, pay equity, human rights, health and safety, supply chain management, other human capital and justice issues

Governance: Corporate board diversity and structure, strategic sustainability oversight and compliance, transparency and disclosure, bribery and corruption, risk management.

ESG helps fashion companies greatly enhance brand by adopting ESG programs with more eco-friendly products, minimize wastes, maximizing recycling and reuse, and rethink resource ownership.

Fashion brands have to think how to create synthetic fibre alternatives and develop more eco-friendly manufacturing and dyeing processes. To invest in ecologically sustainable sourcing practices and circular design and manufacturing. To reduce the consumption of water across the supply chain to help deliver a positive impact on local environments, particularly for marine and freshwater habitats and nearby communities. To set targets to decarbonise the supply chain and halve greenhouse gas emissions and achieve net zero emissions. Technology and research are playing a key role in making the industry more sustainable. The Fashion sector should also spells targets for securing electricity from renewable sources with minimal other environmental or social impacts.

Investments that are not environmentally friendly and do not fit in with sustainable development goals are increasingly poorly perceived by the market and investors themselves. ESG implementation can therefore be an important competitive advantage.

You will learn how an effective CSR and ESG actions can be implemented in a fashion company. We will show you the importance of CSR and ESG actions and the profit they can generate. Other modules will give you a better understanding of the need to create such actions, as well as what precisely they can involve.