ESG: Obligation or Opportunity?
Source: Äri-IT Spring 2025
Authors: Merilin Aug, Talent Manager, BCS Itera & Kristina Ilves, Quality Manager, BCS Itera
In reality, ESG is both an obligation and an opportunity.
You don’t need to dig deep to understand that ESG inevitably affects smaller businesses as well as large corporations. This holds true for both regulatory requirements and business opportunities. It’s increasingly clear that sustainable business practices and organizational management aren’t a fleeting trend, but a lasting shift driven by real and significant issues. Sometimes, it even feels like ESG is simply good old common sense that we’ve forgotten.
Where there are problems, there are also opportunities to solve them. Smarter companies can leverage ESG to create a competitive advantage.
What Exactly is ESG?
A quick Google search defines ESG as a set of environmental, social, and governance standards that help create long-term value. While that sounds clear, in practice, ESG is interpreted very differently. Although it’s generally known that ‘E’ stands for environmental, ‘S’ for social, and ‘G’ for governance, and the acronym ESG signifies sustainability, understandings begin to diverge when companies start discussing ESG among themselves.
The scope for interpretation expands significantly when vague questions and demands come from clients and suppliers. For example:
- “Does your company meet ESG standards?”
- “We can only continue our partnership the year after next if you’re addressing ESG.”
Such questions and expectations are often undefined, leading to confusion and various interpretations. Does this mean compiling and publishing a sustainability report (you can find more information on this topic in another article in this magazine, “Sustainability Reporting Increases Company Competitiveness”), explicit ESG principles and strategies for the company, data on a specific product or service’s carbon footprint – or something else entirely?
ESG covers a very wide range of environmental, social, and governance factors. It’s crucial to identify which standards and regulations apply specifically to your company, considering your industry, location, size, and other important factors. It’s also important to understand the expectations of your value chain and stakeholders.
The biggest challenge is finding a balance between fulfilling obligations and seizing opportunities. It seems that, regardless of worldview, many people understand that the key to sustainable development lies in balancing market economics with sustainable growth.
Why Engage with ESG?
The big picture is simple: to ensure that the environment and the opportunities necessary for a fulfilling life remain for future generations.
For some companies, sustainability has been a focus for years, while for others, it’s a new area of discovery. Large organizations with legal obligations for sustainability reporting are increasingly asking for ESG data from their suppliers, partners, and clients. Therefore, it’s wise to plan ahead to be prepared for this.
Furthermore, companies that adhere to ESG principles can secure more favorable financing terms and become more attractive employers – especially to the younger generation, who consciously prefer organizations committed to responsible practices.
Where to Find Help with ESG Strategy and Roadmaps in Estonia?
Most companies in Estonia are already addressing ESG issues, whether consciously or unconsciously. In recent years, the number of thematic seminars, success stories, and training programs has grown significantly.
ESG management can also be studied at higher education institutions:
- EBS offers an ESG management development program.
- TalTech provides a sustainability expert program, and sustainable business and circular economy can be studied at the bachelor’s level.
- Tallinn University offered a continuing education program in sustainable human resource management in autumn 2024.
Additionally, PwC offers online courses, where you can choose from five separate trainings or complete the entire program.
One of the most practical approaches is the EIS and Sustinere ESG Strategy Masterclass, where companies participate with their teams. This results in the development of the company’s ESG strategy and roadmap.
How is BCS Itera Moving Forward with ESG?
BCS Itera sees several opportunities to make its operations more sustainable and competitive through ESG, both internally and for clients and partners.
To create its ESG strategy, BCS Itera is participating in the EIS and Sustinere Masterclass, with three team members involved from the company. This ensures that all important aspects are covered and the strategy is more comprehensive.
Through this process, we’ve discovered that we already implement many ESG principles – though previously unconsciously. At the same time, opportunities have emerged for us to improve our operations and better communicate the importance of ESG throughout our value chain: to our clients, suppliers, and partners. This will also help raise broader awareness of sustainability.
We’ve also involved our clients in the creation of our ESG strategy and roadmap to understand which ESG topics are important to them. This broadens our perspective and confirms whether we’re moving in the right direction.
The real work, however, begins once the ESG goals are set. Communication, change management, and maintaining focus will help implement the strategy. We also aim to be a valuable partner to our clients and collaborators on ESG topics in the future.
In summary, we’ve understood that it’s important to identify the company’s real and core areas of impact, opportunities, and risks. It’s crucial to focus on what can be done, not what cannot be done. The steps within a company’s power should not be left untaken.