{"id":11214,"date":"2023-06-08T10:20:38","date_gmt":"2023-06-08T17:20:38","guid":{"rendered":"https:\/\/www.qad.com\/blog\/?p=11214"},"modified":"2025-04-16T11:48:52","modified_gmt":"2025-04-16T18:48:52","slug":"is-esg-really-worth-the-trouble","status":"publish","type":"post","link":"https:\/\/www.qad.com\/blog\/2023\/06\/is-esg-really-worth-the-trouble","title":{"rendered":"Is ESG Really Worth the Trouble?"},"content":{"rendered":"

[vc_row][vc_column][vc_single_image image=”11215″ img_size=”full”][vc_column_text]When QAD hosted a <\/span>live webinar<\/span><\/a> earlier this year to explore and analyze the challenges that have procurement leadership buzzing these days, the issue of environmental, social and governance (ESG) was a hot topic.<\/span><\/p>\n

I know that many companies have fully embraced ESG \u2014 whether you\u2019re a true believer or have given in to mounting pressure and, in some cases, legal requirements. But there are still some skeptics out there who look at the changes ESG would require in areas such as product design, supply chain strategy, transportation methods, material and resource consumption, and employee training \u2014 and resist transformation.<\/span><\/p>\n

Despite everyone from <\/span>KPMG<\/span><\/a> to <\/span>Deloitte<\/span><\/a> suggesting a positive correlation between increased ESG and competitive advantage, some companies are feeling overwhelmed by its complexities and aren\u2019t eager to take on the added investment in time, effort and \u2014 <\/span>especially<\/span><\/i> \u2014 money to implement a comprehensive ESG plan. Some want to know: Are the benefits really worth the trouble? <\/span>Is the juice worth the squeeze?<\/span><\/i><\/p>\n

Build Financial Resilience<\/span><\/h2>\n

In a recent <\/span>Solution Review<\/span><\/i> article<\/span><\/a>, QAD Head of Sustainability and Digital Manufacturing Michael Ochi answers that question in an executive-level guide to ESG, and explains how the right approach can improve your business.<\/span><\/p>\n

Michael says that ESG can be a lens through which you build resiliency by reducing waste, managing risk and strengthening your information-to-action pipeline. When you think of it that way, ESG evolves from a confusing concept to a helpful framework for improving non-financial factors that capture the interest of governments and investors alike.\u00a0These non-financial factors can, in fact, lead to a bigger bottom line. Michael cited two studies pointing toward companies seeing above-average financial results after integrating ESG into their strategic plans.\u00a0<\/span><\/p>\n

Researchers \u201cfound a\u00a0positive relationship between ESG and financial performance in 58% of the corporate studies focused on operational metrics or stock price with 13% showing neutral impact, 21% mixed results and only 8% showing a negative relationship,\u201d according to a <\/span>study published by NYU\u2019s Stern School of Business<\/span><\/a>. Meanwhile, international law firm\u00a0<\/span>White & Case<\/span><\/a>\u00a0reviewed 2,000 academic papers and reported that \u201c70% of respondents find a positive correlation between higher ESG scores and financial returns.\u201d\u00a0<\/span><\/p>\n

Basically, Michael says, don\u2019t believe the doomsayers.\u00a0<\/span><\/p>\n

Will ESG hurt? Perhaps. Surgery often does. But when done correctly, it leads to better health. And the good news is: There are ways to turn a potential minefield of problems into a goldmine of opportunity.<\/span><\/p>\n

Look to the Cloud<\/span><\/h2>\n

Michael offered a few examples of how ESG can be improved through established business solutions:<\/span><\/p>\n