A Beacon Gainer article, written by Ally Goldberg, Ethical and Social Impact Business Manager for Beacon Gainer and Miolo private client advisory services group.

One of several challenges which makes ESG a complex and fascinating field is the lack of an overarching, universally accepted set of benchmarks and qualifications for success.

Taking ESG out of the equation, most companies measure their success based on their bottom line and overall profitability. However, in ESG we don’t just measure against a single bottom line. Instead, we have what we call the triple bottom line – profit, people, and planet. But even that is too vague to really know what success looks like.

ESG needs to incorporate many different perspectives

Profit, the general benchmark of a company’s success, is a numerical value, and is therefore easily measurable. People and planet, on the other hand, are relative concepts. What is ‘success’ in those areas?

Take planet, for example. Would you consider a company ecologically responsible if they had a set of policies to reduce their carbon footprint and were working towards that? Or is it only if they have a carbon footprint of zero that you would consider them eco-friendly?

ESG has to try incorporate all of the different perspectives, ideas and philosophies about ethics when benchmarking and measuring impact, as ‘ethical’ is not specific enough on its own.

How do we define ‘ethical’?

When looking at ecology, do we follow a more traditional anthropocentric view of the world, where we view humans as the most significant species and take into account the idea that the environment is first and foremost ours to build on? Or do we take a biocentric view, which would give inherent equal value to all living things? Different moral views lead to different benchmarks for ethical impact.

This also applies to the social side of ESG. How we treat stakeholders ‘ethically’ varies massively depending on your moral viewpoint. Some more traditional philosophies argue that a business ’ primary function should always be profit for its shareholders, and it is only possible to become ethical by first achieving that profit.

Others, meanwhile, take a more utilitarian view that argues that a business should always seek to create the greatest amount of good possible for all its stakeholders, and that all of their needs should be viewed with equal consideration. Some are even more specific – Islamic finance, for instance, cannot have any connection with goods, services or processes that aren’t consistent with Sharia Law.

Benchmarking in ESG is insufficient, so we’ve developed our own measurement system

Benchmarking through systems like the UN SDGs or B Corporations are great starts, but as outlined in our previous article here, they come with their own sets of problems. One of those challenges is that they are very broad, so companies of completely different sizes, structures and industries are all measured against the same benchmark, making it hard to consider case-by-case scenarios.

At Beacon Gainer, we have developed a practical assessment method which enables planning tuned to the unique ESG issues that our independent advisory services face. We look at every company on a case by case basis and offer bespoke advice that is mindful of their particular goals and challenges.

It is for this reason that we are able to provide an insight for our clients asking for professional services which have an excellent ethical record and the intention to continuously improve their purpose principles and performance in this sphere.

When we work with businesses on a case-by-case basis like this, it opens the door to discussions about moral relativity and to develop an understanding of what ESG, CSR and ethical performance means to individual clients. As a client, we can help you discover your advisory service requirements to achieve your life plans and wellbeing, underpinned if desired by particular values and approach to ESG from an advisor, to ease your way, all one secure platform.