Table of Contents

Table of Contents

Significance of Working Capital Management for MSMEs
How SCF is better than other financing options
Why SCF is synonymous to easy financing
How SCF is Transforming MSMEs in B2B Industries
Make your business credit ready through SCF

Why is an ESG Score important for your business?

April 3, 2024
min read

Over the past few years, more and more companies are interested in measuring and reporting their environmental, social, and governance (ESG) Score. These ESG Scores are crucial for companies to assess their impact on society and the environment, as well as for investors to evaluate their sustainability and ethical practices. Due to the increased demand, numerous ESG reporting platforms have been developed to aid companies in tracking and analysing their ESG score.

What is an ESG score?

An ESG score provides an unbiased evaluation of your company's performance in the realm of ESG (Environmental, Social, and Governance). ESG  score assesses two primary aspects: your proficiency in managing ESG factors and your level of vulnerability to ESG-related risks. Additionally, these scores are frequently applied to assess the performance of funds and securities.

ESG reporting platforms help organizations track and report their initiatives related to environmental, health, regulatory, social, and safety management. ESG platform is designed to help corporate leaders by collecting data from various sources and presenting it in a way that can be easily understood. By communicating policies and procedures effectively, organizations can promote positive ESG practices that can improve their revenue, company valuation, and brand perception.

Know your ESG score with Bizongo and plan ways to transform ESG compliance, attracting large and global enterprises looking for ESG-compliant suppliers.

Why Scorecard for your business helpful for you?

Reach and Convert Large Enterprises

A strong ESG scorecard can help vendors reach and convert large enterprise customers:

  • Large enterprises are increasingly instituting ESG compliance requirements for their supplier networks. A strong scorecard provides credible evidence for vendors.
  • Sustainability-focused vendors can get preferential status in procurement decisions by showcasing ESG Scorecard. It makes them lower risk partners.
  • Enterprises get quantified visibility into potential vendors' ethical practices, emissions, diversity policies etc. through ESG scoring.
  • Public ESG disclosures allow vendors to attract new business from values-driven enterprise buyers proactively seeking green partners.
  • High ESG scores help smaller vendors compete with larger players for enterprise contracts based on sustainability merits rather than just size.
  • Responsible vendors become partners of choice for enterprises pursuing sustainability commitments like zero-emission supply chains.
  • Strong ESG credentials open doors for vendors to tap into global supply chain opportunities with multinational corporations.

Enhance Your Brand Value

A strong ESG performance can enhance a company's brand value and reputation. Here’s how:

  • Companies ranking high on industry ESG benchmarks gain positive public recognition as sustainability leaders. This boosts brand visibility.
  • Consumers are more likely to trust and support brands that are transparent about their social and environmental impact.
  • Brands that invest in their communities and treat workers ethically build affinity and goodwill with consumers.
  • Investors view strong ESG practices as a proxy for a well-managed company with long-term vision, resulting in higher valuations.
  • Sustainability-focused brands attract and retain talented employees, especially millennials, who seek purpose-driven companies.
  • Companies operating responsibly avoid the reputation risks and backlash caused by unethical incidents or regulatory non-compliance.
  • High ESG standards across the supply chain reflect positively on the lead brand's commitment to responsible sourcing.
  • Brand value stems not just from product quality but also from what a company stands for. ESG helps build brand equity.
  • Marketing a strong ESG profile differentiates the brand in consumers' minds as caring, ethical and progressive.

Get Access to Capital Subsidies by the Government

Here are some points on how a strong ESG scorecard can help vendors access government capital subsidies and incentives:

  • Governments globally are encouraging ESG adoption by linking incentives like subsidies, tax breaks and low-cost financing to sustainability metrics.
  • Certifications like India's ZED scheme for MSMEs provide graded incentives and credit subsidies to companies based on ESG parameters.
  • Scoring well on government or industry ESG scorecards gives credibility to vendors applying for grant funding targeted for green investments.
  • Vendors meeting emissions reduction or renewable energy adoption thresholds can qualify for tax rebates, scrappage benefits, capital equipment funds.
  • High social impact performance metrics make a vendor eligible for incentives promoting women entrepreneurship, skill development etc.
  • Governments often partner with banks to offer lower interest rate loans to companies with verified ESG compliance and disclosures.
  • Priority or discounted access to public procurement contracts is granted to businesses with high ESG scores.
  • Funds are allocated by governments specifically for entrepreneurs integrating ESG into their business models during the start-up stage.

In summary, a strong ESG scorecard helps vendors signal their commitment to regulators and benefit from a range of incentives, subsidies and preferential access to capital for growth.


Save Costs through Water and Energy Management

Here are some points expanding on how strong ESG performance can reduce costs and risks for a business:

  • Monitoring emissions and optimizing energy management lowers energy bills and contributes directly to cost savings.
  • Responsible water usage and switching to renewable sources like rainwater harvesting reduces water costs.
  • Sustainable waste management practices like recycling cut down on waste disposal expenses.
  • Environmental efficiency improvements through IoT, automation and cleaner production lower compliance costs.
  • Ethical labor practices and fair wages reduce employee turnover costs and risk of strikes. 

In summary, focusing on ESG score mitigates sustainability-related risks and creates direct cost efficiencies that improve the bottom line. It also ensures smooth business continuity.

ESG is no longer a nice-to-have, but a must-have for businesses that seek to thrive in a super competitive landscape. Partner with us, measure your ESG Score, and enhance your sustainability efforts.

Apart from this, What makes ESG scoring important?

Stakeholders utilize ESG score to assess whether your company is a worthwhile investment. In today's environment, ESG (Environmental, Social, and Governance) considerations matter significantly to investors and consumers. Investors, in particular, acknowledge the substantial financial commitments made towards ESG initiatives and are well aware of the extensive research demonstrating their positive impact on long-term success.

In essence, most stakeholders incorporate ESG scores as a crucial component of their business evaluation process, especially in highly competitive industries. If your company's ESG track record is subpar or, worse yet, if it lacks any ESG score history, investors are likely to favor a competing business.

India has been closely observing the ESG revolution that has reshaped advanced economies and global investment strategies. Now, it's an opportune moment for the world's fifth-largest and fastest-growing economy, which plays a prominent role in the G20's ESG agenda, to take decisive action. Fortunately, India acknowledges its responsibilities, and its regulatory bodies consistently exhibit enthusiasm for embracing new challenges in this regard.

Ready to distinguish yourself in the market and draw in a global customer base? Take the next step by filling out our ESG form, and you'll gain access to a comprehensive evaluation of your ESG Scorecard, complete with a scorecard rating and an in-depth report pinpointing areas for enhancement. Achieving a strong score on the scorecard is your key to securing a competitive advantage in the market. Don't miss out on this opportunity to shine and thrive!

Measure ESG Score | ESG SCorecard

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