ESG vs. SDGs: Which is More Important for Building a Sustainable Business?

In a world where everything must be sustainable, how can we ensure that businesses truly achieve long-term sustainability? This is a crucial question that many modern entrepreneurs may still not have an answer to.

When exploring sustainable practices, we come across two terms related to an organization's sustainability dimensions: ESG and SDGs. But how do these two terms differ, and how can they be effectively applied to ensure real business growth?

Sustainability Through ESG

ESG stands for the principles of business operations that consider Environmental (E), Social (S), and Governance (G) factors, aiming for sustainable organizational growth. This concept has gained significant attention in recent years.

The evolving global societal context has compelled the business sector to shift its strategies for driving organizations forward. It is no longer solely about maximizing profits or minimizing costs. Instead, businesses must consider all stakeholders involved in their operations, including customers, partners, employees, communities, and even the environment.

Imagine if a company could increase its profits by discharging wastewater into water sources. In the long term, this would inevitably affect the surrounding communities and could lead to legal action. Similarly, choosing business partners who lack ethical standards could affect investor confidence, a company’s revenue, and profit opportunities. This is why companies must prioritize the interests of all stakeholders comprehensively, following the ESG principles.

Another critical group of stakeholders that businesses should not overlook is investors. Today, both major institutional investors and individual investors incorporate ESG principles into their analysis of company stocks. They believe that organizations adhering to ESG practices not only operate transparently and offer good long-term returns but also face lower business risks and have a competitive edge over the broader market.

Longevity Through SDGs

SDGs, or Sustainable Development Goals, are the United Nations' (UN) framework for achieving sustainable global development. These goals encompass key issues related to global sustainability.

Beyond growing a business sustainably through ESG principles, it is crucial to focus on creating long-term value for the business. This ensures that the direction of business operations will truly have a positive impact on all sectors. SDGs are used to guide the long-term operational strategies of businesses, complementing the ESG approach mentioned earlier.

SDGs consist of 17 development goals endorsed by 193 UN member countries, all of which must work together to achieve these targets by 2030. These goals can be categorized into five dimensions (5Ps):

• • People: Focus on human development, eradicating poverty and hunger, and reducing social inequality.
  • Planet: Protect natural resources and the climate for future generations.
  • Prosperity: Promote economic growth that ensures a good quality of life for people while being in harmony with nature.
  • Peace: Uphold the principles of peaceful, inclusive societies where unity prevails.
  • Partnership: Foster collaboration across all sectors to drive the sustainable development agenda forward.

Applying ESG and SDGs in Business Operations

To achieve sustainable business growth, it is essential to integrate both ESG and SDGs into the company’s operations. ESG principles are often applied to short-term operational plans or as practices that can be implemented immediately, with visible outputs in a short period. These outputs may lead to broader outcomes or impacts over the medium to long term. Therefore, it is necessary to incorporate SDG goals into the business strategy to ensure that the organization ultimately creates a positive impact and achieves stable growth.

SCGC, a leader in sustainable polymer innovation, is committed to fostering business growth while serving as a model for sustainability. The company has adopted ESG and SDG principles in a tangible and continuous manner, analyzing operations throughout the value chain to set the direction for driving the organization forward.

----------------------------------------------------------------------------------

Most-read Stories

• "Transforming Dry Lands to Prosperity": Building a Low-Carbon Society
• 4 Key 2024 Technology Trends to Tackle Global Warming and Global Boiling
• REPCO NEX Industrial Solutions: Achieving Success in Industry 4.0 and Green Industry
• Career Trends 2024: “Job Rotation” Changing Roles to Enhance Knowledge and Skills
  

----------------------------------------------------------------------------------

Each year, SCGC publishes a Sustainable Development Report (SD Report) that details the company’s performance in various areas related to stakeholder engagement across all dimensions. The report also outlines the strategies for driving the organization with a focus on Environmental, Social, and Governance considerations, as follows:

1. Increase the Proportion of Sustainable Products and Solutions

• • Increase the sales volume of green polymers and expand the range of eco-friendly products.
  • Develop products with a low carbon footprint.Create high-value products that cater to megatrends (such as health and the aging society, automotive, urbanization and infrastructure, and renewable energy).
  • Focus on the efficient use of natural resources, energy conservation, and reducing global warming.

2. Promote Sustainable Operations Throughout the Value Chain

• • Reduce greenhouse gas emissions and aim for carbon neutrality by 2050.
  • Choose low-carbon, environmentally friendly raw materials.
  • Increase eco-efficiency through various environmental initiatives, such as reducing water usage, minimizing waste generation, and lowering air pollution.
  • Create a happy and safe working environment for employees and suppliers.
  • Prioritize human rights principles.

3. Develop Solutions for Society

• • Promote community livelihoods by applying circular economy principles to bring plastics back into the recycling process (Close the Loop for Plastic) and move towards a low-carbon society. SCGC has previously implemented circular economy initiatives such as the "Waste-free Community" project, which promotes proper waste management within communities. This has been expanded into the "Upcycling Milk Pouches Project," which encourages young people to separate waste from milk pouches, which are then recycled into chairs, allowing children to see tangible results from waste separation.
  • Create a safe society and reduce inequality through various social initiatives.
  • Empower communities to become self-reliant by developing strong community enterprises. The "Amazing Community" project focuses on creating jobs, adding value, and supporting self-sufficiency through community enterprises in Rayong province.
  • Utilize SCGC's expertise and experience to create sustainable value for society.

Furthermore, SCGC aligns its business operations with the SDGs, or Sustainable Development Goals of the United Nations, by clearly prioritizing relevant goals and objectives. For example, four main goal groups include:

Goal 8: Promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all

• • Sub-goals: 8.2, 8.3, 8.5, 8.7, 8.8
    

Encourage economic growth at both the business and community levels by emphasizing equal employment opportunities and creating valuable jobs. This approach aims to drive overall economic progress, including continuous planning of production and operations to reduce the impact on the environment and global resources.

Goal 12: Ensure sustainable consumption and production patterns

• • Sub-goals: 12.2, 12.4, 12.5, 12.7

Adopt circular economy principles in business operations to enhance resource efficiency and reduce the risk of resource scarcity, which is a critical factor for future production. This also helps minimize environmental impact.

Goal 9: Build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation

• • Sub-goals: 9.4, 9.5

Prioritize the integration of innovation and technology throughout the business value chain to improve operational efficiency, create added value, and enhance competitiveness. This approach will serve as a strong foundation for long-term business resilience.

Goal 13: Take urgent action to combat climate change and its impacts

• • Sub-goals: 13.1, 13.3

Accelerate adaptation and operations across various dimensions to reduce greenhouse gas emissions. This includes collaborating with all sectors to enhance society's and communities' ability to adapt and prepare for climate change, which could potentially impact both businesses and society.

It is evident that both ESG and SDGs share the common objective of sustainability, and both are equally important. They are widely recognized and applied across various sectors. SCGC has consistently adhered to ESG and SDG principles in its operations, enabling the organization to grow sustainably alongside all its stakeholders.