Companies seeking investment are more likely to secure funding if they can demonstrate ESG credentials.

Entrepreneurs who are seeking investment will benefit from improving their environmental, social, and governance (ESG) practices, according to Fresh Thinking Advisory.

The funding advisory experts advise that investors increasingly seek companies with good ESG practices. These companies typically demonstrate a considered approach to business, which often points to a stronger understanding of corporate and environmental risk and also helps protect against potential social media controversies.

Fresh Thinking Advisory argues that investors are focused on using their capital to promote the ESG agenda and are incentivised to seek out businesses that positively impact the environment and society. They will often secure more attractive terms by demonstrating a pro-active approach to ESG within the company or, for example, help promote a sustainable future by contributing to the circular economy.

Commenting on Oliver Reece, managing director of Fresh Thinking Advisory, said: “Sustainability is a major thread of ESG, and a company that isn’t actively pursuing it risks becoming obsolete in the medium to long term, whether through increased expenses, loss of customer confidence, or costly design revisions to meet ever-changing rules.

“Investors seek more stable and predictable returns, and positive ESG factors can indicate a company has the potential for long-term sustainability and profitability. Investors recognise that companies focusing on ESG are better equipped to adapt to changing market conditions, societal expectations, and environmental challenges, which can lead to stronger financial performance over time.”

Fresh Thinking Advisory argues that firms with strong ESG practices often have better reputations and brands. Consumers are increasingly conscious of their purchases’ ethical and environmental impact, and companies with favourable ESG profiles may enjoy more consistent customer loyalty and demand for their products and services.

A company’s growth can also be supported through strong ESG practices because they are often more attractive to talented employees. A socially responsible and sustainable corporate culture can help attract and retain top talent.

Oliver Reece concluded: “Ultimately, ESG can provide a competitive advantage by differentiating a company in the market. Companies proactively addressing ESG issues may have a first-mover advantage and capture market share as consumers and investors gravitate toward responsible and sustainable options.”

By providing impartial debt advisory services, Fresh Thinking Advisory assists businesses looking for a wide range of secured and unsecured finance options. The company offers a whole market debt advice service and leverages its knowledge and connections to assist clients in obtaining and renegotiating debt financing.

Featured in the Yorkshire Times