In recent years, one three-letter acronym has become a top priority for companies large and small: ESG.
ESG stands for three broad categories—Environmental, Social, and Governance—that initially were most important to socially responsible investors. Today, however, many other stakeholders stress the importance of a company’s ESG performance, and it’s become a vital measurement for corporate leaders.
Sloan’s new Vice President of Sustainability, Paul Sambanis, is enthusiastic about improving our ESG performance—and about working with our customers and partners to help improve theirs.
Here’s what Paul has to say about ESG and why it’s so important—for the planet, for the next generation of professionals, and for corporate performance.
What ESG Means for Today’s Businesses
Paul says ESG represents a company’s conscience. For investors, it’s, “an incorporation of their values and concerns into their selection of investments instead of simply thinking about the potential profitability of an investment opportunity.”
At Sloan, “we see ESG as our conscience when it comes to decision making. Having these three pillars is instrumental in making those decisions as part of that process.”
Here’s a closer look at each pillar:
- Environmental criterions consider how a company safeguards the environment and addresses climate change.
- Social criterions consider relationships with employees, suppliers, customers, and communities.
- Governance criterions deal with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.
While the Securities and Exchange Commission (SEC) currently requires ESG statements only from publicly traded companies, Paul says, “The convergence of public policy and private ownership is rapidly spreading worldwide, and we're seeing social environmental movements in the U.S. and the representatives we elect. But as a private company, we must lead ESG efforts proactively.”
A Long-time Champion of the Environment
“The building industry depends on how we treat our environment,” Paul says. “Sloan does it right, managing our environmental impacts as stewards of the planet.”
Sloan has long championed sustainability and wellness both internally and with our partners in architecture, design, engineering, and facility management. Our efforts include:
- Innovative, water-saving technologies that protect the planet’s most precious natural resource
- Environmental Product Declarations (EPDs) that communicate how much a product's composition impacts the environment across its entire life cycle
- Health Product Declarations (HPDs) that reveal the potential human health effects of the materials and substances contained within our products
- Carbon neutral products with reforestation credits that offset the cradle-to-grave carbon footprints of our products
“Now we have what's called an optimization report,” Paul says. “Our customers can now get an additional point as part of their LEED certification, because not only do we have an EPD for our product, but we've actually documented the improvement our global warming potential impact over time.”
The Appeal of ESG Performance to a Younger Generation
The high ESG standards Sloan maintains aren’t just for corporate boards and investors—they’re also a way to connect with a younger generation of employees and customers.
“It's actually helping us with recruiting,” Paul says. “A lot of the younger generation is very interested in working for a company that they feel is making a difference in this world. And they have a lot of opportunities to work wherever they want.”
One benefit of attracting younger employees is that they’re also more likely to help improve ESG initiatives. Paul explains, “Some projects developed by those younger engineers are a huge game changer. They come up with ways to reduce our waste in a significant way or find innovative ways to be more sustainable.”
Many of our customers and partners share our commitment to elevated ESG performance. They know younger people want to work for companies who do things right—and work in facilities that are built to reflect those standards.
Right for the Bottom Line, Right for the Community
Paul understands that the ideas behind ESG may feel burdensome to some companies. His perspective:
“I've never helped fund a sustainability project that hasn't ultimately paid itself out with a positive return on investment. So let's take climate change out of there and think about it from an operational perspective. Focusing on environmental and sustainability strategies can help any company run more efficiently, whether it's public or private.”
Of course, “Environment” is just one third of ESG. Paul brings up a recent scandal—where an automaker falsified its emissions testing records—to highlight the importance of “Governance.”
“Essentially their cars looked like they were in compliance when they weren't. As a consumer, you may believe, ‘I thought I was doing the right thing, buying a product based on the claim that they were making, just to find out that that wasn't occurring.’ I know a lot of people that were so upset that they'll never buy from them again.
“If a company is not audited or keeping themselves honest and structured in a way that makes sense—if you don't have the correct checks and balances in place—bad things can happen.”
Our commitment to ESG criteria is a promise to our partners, our customers, and our community that we’ll do the important things right.
Contact Paul Sambanis to learn more about the importance of ESG criterions to Sloan, our partners, and our customers.
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