Building an ESG Business Case
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More and more, consumers, processors, suppliers and retailers are making buying decisions based on a company’s commitment to environmental, social and governance principles. On a recent Food Institute podcast, Erica Kuhlmann, BMO Commercial Bank’s Head of Food, Consumer and Agribusiness; Jonathan Hackett, BMO’s Head of Sustainable Finance; and Marc Khouzami, Managing Director of BMO’s Impact Investment Fund, offered their perspectives on how ESG impacts everything from agriculture production to employee recruitment to access to capital for companies across the food sector.
At a basic level, ESG is a set of standards that determines whether a company falls under the umbrella of “sustainable investing.”
- Environmental criteria could include energy use, waste management and treatment of animals.
- Social criteria deals with an operation’s relationships with its employees, suppliers, customers, and the communities where it operates. For example, does it work with suppliers that have the same values as the operation claims to have? Are working conditions safe and healthy for employees?
- Governance deals with a company’s leadership and internal controls among other factors. For example, does the operation have conflicts of interest, or work with suppliers that have conflicts of interest?
BMO’s experts discussed how ESG can provide companies with opportunities to differentiate themselves for their customers, as well as the near- and long-term risks of not addressing ESG concerns.
ESG can be hard to quantify. But as Kuhlmann said, it’s not going away. It’s important to customers, employees, investors and financial providers. And as Hackett pointed out, we're getting to the point where the cost of and access to capital are driven in part by adopting an ESG mandate.
The companies that ask the right questions and seek out the ESG strategies that work for their business can put themselves in a position to thrive in this sustainability-focused environment.
Listen to the discussion on your preferred podcast channel:
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Erica Kuhlmann
Market Executive & Managing Director, Food, Consumer and Agribusiness Group
Erica T. Kuhlmann is a Managing Director and Market Executive of BMO Commercial Bank's Food, Consumer and Agribusiness Group. The Food, Consumer and…(..)
View Full Profile >More and more, consumers, processors, suppliers and retailers are making buying decisions based on a company’s commitment to environmental, social and governance principles. On a recent Food Institute podcast, Erica Kuhlmann, BMO Commercial Bank’s Head of Food, Consumer and Agribusiness; Jonathan Hackett, BMO’s Head of Sustainable Finance; and Marc Khouzami, Managing Director of BMO’s Impact Investment Fund, offered their perspectives on how ESG impacts everything from agriculture production to employee recruitment to access to capital for companies across the food sector.
At a basic level, ESG is a set of standards that determines whether a company falls under the umbrella of “sustainable investing.”
- Environmental criteria could include energy use, waste management and treatment of animals.
- Social criteria deals with an operation’s relationships with its employees, suppliers, customers, and the communities where it operates. For example, does it work with suppliers that have the same values as the operation claims to have? Are working conditions safe and healthy for employees?
- Governance deals with a company’s leadership and internal controls among other factors. For example, does the operation have conflicts of interest, or work with suppliers that have conflicts of interest?
BMO’s experts discussed how ESG can provide companies with opportunities to differentiate themselves for their customers, as well as the near- and long-term risks of not addressing ESG concerns.
ESG can be hard to quantify. But as Kuhlmann said, it’s not going away. It’s important to customers, employees, investors and financial providers. And as Hackett pointed out, we're getting to the point where the cost of and access to capital are driven in part by adopting an ESG mandate.
The companies that ask the right questions and seek out the ESG strategies that work for their business can put themselves in a position to thrive in this sustainability-focused environment.
Listen to the discussion on your preferred podcast channel:
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