Renowned entrepreneur and a Founder of ITCOMMS, Alexander Likhtman, recently delivered a thought-provoking workshop in Tashkent, Uzbekistan, shedding light on the applicability of Environmental, Social, and Governance (ESG) principles to small businesses. Likhtman via written interview with Daryo addressed key aspects of ESG and entrepreneurship, providing insights into its relevance for smaller enterprises.
- Impact of ESG Principles on Small Businesses
Responding to an intriguing question about the relevance of ESG for small businesses, Likhtman highlighted the profound impact smaller enterprises can have on their local communities. Despite limited access to international funding, small businesses can adopt ESG principles to contribute positively to their immediate environment.
“By adopting ESG principles, they not only contribute positively to their immediate environment but also set an example for ethical business practices,” Likhtman noted.
Likhtman emphasized that this approach not only fosters ethical business practices but also enhances customer loyalty, reputation, and competitiveness in the market.
- ESG and Talent Attraction in Small Firms
Likhtman discussed how ESG-active small businesses can compete for talent, particularly among the younger generation. He explained that Gen Z values purpose and alignment of personal values with their workplace. ESG commitments provide a sense of contribution to making a positive impact and attracting and retaining talent in small businesses.
“Small businesses with strong ESG vectors often seem attractive to this demographic. They offer a sense of contribution to making an impact, which resonates with the value-driven types of younger talent,” Likhtman voiced.
- ESG and Customer Perception
Likhtman elaborated on how ESG activism in small businesses influences customer perception, differentiating them from direct competitors. He cited examples of local businesses engaging in ESG initiatives, such as donating leftover food, to build a loyal customer base amid fierce competition with global players.
”A local coffee shop giving away leftover foods to those in need in the evenings, for example, can appeal to the local communities accustomed to donating “sdaka” and being generous and helpful. Such practices may build a loyal customer base, though a fashionable Starbucks may be located just next door.”
- ESG and Market Expansion
The entrepreneur discussed how ESG commitments facilitate market expansion for small businesses. He used the example of Central Asian garment manufacturing, where adherence to fair-trade principles opens doors to international markets. Likhtman emphasized that being ESG-ready positions businesses to seamlessly integrate into the global production chain.
- Unique Opportunities in Media and Communications
Drawing on his role as PR Director at EA Group Holding, Likhtman highlighted how ESG initiatives provide small businesses with unique storytelling opportunities in media and communications. He noted that ESG efforts create compelling narratives that resonate with both the media and the public, differentiating small businesses from larger financial holdings.
- Distinguishing Genuine ESG Efforts from Greenwashing
Finally, Likhtman emphasized the importance of distinguishing genuine ESG efforts from greenwashing. He stressed that tangible actions, transparency, and alignment with core business operations are key factors in determining the authenticity of ESG commitments. Likhtman cautioned against peripheral activities that merely seek to deceive the public, underlining the depth of commitment as a crucial factor.
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