Why ESG is Critical for the Cannabis IndustryGeoff Trotter, CGO and Co-Founder of Regennabis, joins A Tech Moment to discuss the environmental, social, and governance requirements to gain the interest of mainstream investors.
Geoff Trotter has an extensive background in international business. With more than 35 years of living and working in a global capacity, Trotter brings an incredible amount of knowledge and expertise to the emerging industries of cannabis and hemp. Partnering with Patrick McCartan to form Regennabis, Trotter is helping cannabis companies understand and embrace ESG – not just for the investment opportunities but for a brighter future for all of us.
What is ESG – Environment, Social, Governance
ESG stands for Environment, Social, and Governance, or as Trotter called it, "a triple bottom line approach" to business practices. Having a solid ESG Framework in place shows investors and stakeholders that the company is taking the planet, its people, and profits into consideration while meeting all the requirements and standards defined by authoritative organizations.
From the point of view of most investors, a solid ESG strategy helps to display a company’s ability to deliver on performance objectives and reassure investors.
The Perfect Storm – The Time is Now!
Trotter also explains that up until now, the cannabis and hemp industries have been overly focused on the economic benefits of the ‘Green Rush’ and not enough on other forms of capital. Trotter said, “There’s nothing wrong with capitalism, but from our perspective, we like to take a ‘multi-capital’ view and deliver on human, social, intellectual, and natural capital as well.”
He continued, "No matter how wealthy you are or how well-positioned you are geographically, we're all fundamentally in the same boat. And, if we don't take care of the planet, we're all going to struggle. Now is the time to course-correct."
As more and more investors start looking to add to their portfolios, they seek "well-behaved" organizations that present little risk.
93% of Fortune 500 companies have a well-defined ESG strategy indicated in their ESG reporting, but less than 1% of cannabis businesses have an ESG Report. As Trotter explained, this must change – institutional investors are “seeking those ‘grown-up’ companies” to invest in.”
"An ESG report, or sustainability report, is not the end game; it's part of the journey," Trotter added.