You may have seen the acronym ESG floating around, especially in earnings reports and company updates. This relatively new concept is gaining momentum and shaping the way many companies are doing business.
What is ESG? ESG stands for ‘Environmental, Social and Governance,’ and it describes factors many companies are now using to guide their operations with responsibility and ethics toward society in mind. The theory behind ESG is that a focus on these three tenets of company behavior, including hiring practices and operational processes, makes the company more attractive to investors, customers, regulators and employees. ESG also is thought to reduce various risks and increase company success.
Environmental factors generally refer to how a company safeguards the environment, including energy consumption, emissions and equipment end-of-life. Social factors refer to how the company manages relationships with employees, suppliers, customers and the community. Governance addresses the company’s leadership, executive pay, internal controls and shareholder rights.
ESG considerations can vary widely among industries. In the wireless industry, for example, infrastructure that connects individuals, companies and governments typically consume about 1 percent of a country’s total electricity consumption, according to PwC Partner Rolf Meakin in an interview with Financier Worldwide. The ongoing rollout of the next generation of ultra-high-speed communications networks will enable greater economic inclusion and have the potential to improve energy efficiency, he said.
Several companies in the wireless infrastructure ecosystem are already forging ahead with ESG initiatives.
American Tower reports on its ESG initiatives annually. For 2021, the company pointed to its efforts to reduce emissions, expand its portfolio of solar capacity, continue to establish digital communities, distribute nearly $6 million in workplace giving and matching programs and become a signatory to the United Nations (UN) Global Compact and the UN’s Women’s Empowerment Principles.
“Our sustainability program is grounded in our strategic priorities to foster a more equitable culture for our employees, improve our operational efficiencies, support the needs of our customers, uphold ethics and integrity at every level of the organization and engage with our local communities,” said Tom Bartlett, president and CEO of American Tower. ”Steadfast commitment to these key priorities will be integral to our continued success, especially as we continue to grow our business in this technology-driven era.”
DigitalBridge Group Inc. published its 2021 Environmental, Social and Governance (ESG) Report this summer, which outlines the company’s approach to creating a positive global impact, driving sustainable growth and advancing its ESG initiatives across its portfolio companies, as well as notable recent ESG achievements and commitments for 2022.
“At DigitalBridge, we are focused on raising the bar as we invest in value-add digital infrastructure opportunities,” said Marc Ganzi, chief executive officer of DigitalBridge. “We are proud to have further evolved our responsible, sustainable approach to owning and managing our portfolio companies over the past year. Moreover, the successful implementation of our company-wide ESG initiatives and commitment to reaching net zero by 2030 have set higher standards for us all.”
In addition to its commitment for portfolio companies to achieve net zero, DigitalBridge has worked to ensure all its portfolio companies manage their environmental performance in a manner that seeks to conserve natural resources, reduce operating costs and adhere to all local regulations.
Belden, a global supplier of specialty networking solutions, announced its first reporting of ESG data this year. Belden’s environmental goals include reducing greenhouse emissions; increasing the use of renewable electricity and increasing total global electricity use efficiency at manufacturing and distribution locations; minimizing waste generation including hazardous wastes and requiring recycling of waste rather than disposal. Belden’s social goals include fostering a culture of teamwork through diversity and inclusion. The company hired a director of inclusive culture and has a goal of delivering unconscious bias training to 100 percent of its team worldwide by 2025.
“ESG is a key piece of Belden’s overall strategy,” said Roel Vestjens, president and CEO. “These efforts will positively impact Belden associates, enhance our care of the world around us, and continue our long-standing commitment to operating with the highest level of ethics and responsibility. From our ESG commitment to our shift to providing comprehensive solutions for our customers, many of which enable them to accomplish their own sustainability goals, there are many initiatives taking place which demonstrate the transformation driving the next chapter in Belden’s history. I’m so proud of all Belden associates who share the passion for bringing this to life.”