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With the cannabis industry growing fast, businesses must look ahead to the future. Not only should you worry about keeping your stock levels and profit margins high, but you should also consider your environmental, social, and governance (ESG) principles. These three factors are important to all cannabis businesses for numerous reasons. The environmental impact of […]
With the cannabis industry growing fast, businesses must look ahead to the future. Not only should you worry about keeping your stock levels and profit margins high, but you should also consider your environmental, social, and governance (ESG) principles. These three factors are important to all cannabis businesses for numerous reasons.
The environmental impact of your business can affect many things, including your ability to get licensed. Social principles are also becoming increasingly important for social-conscious consumers. Your governance principles can also affect your brand reputation and even determine whether investors are willing to invest in your business.
Here’s a guide to why ESG is important to cannabis businesses and how you can improve your ESG initiatives.
Simply put, ESG stands for environmental, social, and governance. These three factors are becoming increasingly important for businesses across the world, including cannabis businesses. Your ESG impact can have a significant impact on all kinds of things, including your brand reputation, your customer loyalty rate, your business sustainability, and even whether investors are willing to invest in your business.
Cannabis businesses that focus on improving their environmental impact will likely remain sustainable long into the future. New laws are emerging to ensure businesses are environmentally friendly and sustainable. Some states even require cannabis businesses to be eco-friendly to get licensed.
Your social impact is also important – especially to consumers. People want to buy from cannabis businesses that support good causes, such as helping with cannabis criminal justice reform and promoting inclusivity. Governance refers to aspects such as how your business is run, how well employees are treated, and pay equity. In addition to impacting your brand reputation, these metrics are also important to investors.
There are many reasons why ESG is important to cannabis businesses. One of the key reasons why cannabis businesses should focus on upholding good ESG principles is that it can help them gain funding. Funding a marijuana business can often be tricky – banks don’t offer loans to marijuana-related businesses and, as such, these businesses often rely on investors.
Cannabis business investors will consider your ESG principles before investing in your business. If you’re planning or running a business that isn’t environmentally sustainable, most investors will look the other way. What’s more, good social and governance principles are becoming very important to both consumers and investors.
If you’re starting a cannabis business, you should start thinking about ESG when you write your business plan. Planning to ensure your business is environmentally friendly and socially conscious can make your business particularly attractive to investors and venture capitalist firms. Even if you’re already running a cannabis business, you should keep these factors in mind if you’re seeking funding.
Your ESG principles aren’t just important to investors. Nowadays, consumers often consider these three factors when choosing the businesses they buy from. As such, your environmental, social, and governance principles are closely tied to your brand reputation and can dictate whether or not you attract new customers.
Offering high-quality products and good service can take you far. However, if your business isn’t environmentally friendly, this can result in bad press for your business and impact your brand reputation negatively. The same applies to your social and governance principles. Eventually, this can result in consumers staying away from your business.
In contrast, a business that focuses on environmental sustainability and good social and governance principles can net a lot of good press. As a result, many consumers will be more likely to check your business out. Environmentally and socially conscious consumers are also more likely to become loyal customers for your business if you show that they can trust your brand.
Another reason why ESG is important for cannabis businesses is that it can help with your business sustainability. Naturally, a business with environmentally friendly principles can continue to run long into the future without worrying about ruining the environment. However, these principles are also helpful for other reasons.
As time goes on, environmental issues are becoming more important to governments around the world. New laws are constantly emerging to reduce the environmental impact of businesses and corporations. If your business isn’t environmentally sustainable, it may face legal problems or even fail to obtain licensing in the future.
Your social and governance principles are also important. Companies with good social and governance principles are more likely to attract customers, gain funding, and even attract the best talent. Failing to do these things can result in your business struggling or failing altogether. As such, companies with good ESG initiatives are much more likely to stay afloat.
If you’re running a cannabis business and haven’t carefully considered your ESG impact before, you might not be sure where to start. Taking steps to implement good ESG principles throughout your business will help you in many ways, and you can start by taking small steps.
You can start by taking steps to reduce your environmental impact. Even reducing your energy usage can help. You should also ensure you use energy-efficient equipment in your business. Many businesses nowadays also contribute a portion of their earnings to environmental and social organizations and charities. This often appeals to consumers and investors.
As for your governance, make sure you run your business with fairness and equality in mind. Offering good pay and an attractive benefits package can help you attract the best talent for your business. You might even want to consider hiring former prisoners who were imprisoned for archaic cannabis-related charges.
ESG is important to cannabis businesses for various reasons. Good ESG principles can help you gain more customers, impress investors, and even attract the best staff for your business. Failing to consider these things can often lead to negative press, legal problems, and a bad brand reputation.
Of course, it’s not just ESG you need to consider if you want a successful cannabis brand. Everything from your website design to your marketing can have an impact on how you’re viewed. For guides, resources, and branded products for enhancing your cannabis brand, visit Cannabis Promotions.