If your company is getting on board with ESG, consider a strategy that also focuses on improving business and looks beyond the mere gathering of regulatory metric data and results reporting.
It may seem like a relatively new set of business principles, but environmental, social and governance (ESG) thinking traces back to the early 2000s when a first wave of sustainability emerged.
Back then, minimizing your negative impact on the planet earned good public relations without having to do much, since at the time nothing needed to be proven. A company could make claims and cite sustainability results without much scrutiny.
ESG Emerges from Sustainability
But without legislation or a real push behind the effort, momentum was lost for a while. The public wasn’t ready at that point to seriously look at investing in companies that were sustainable since most of the products they sold were significantly more expensive. However, as investors got more involved, sustainability received a much greater push as a priority, bringing together people looking to do good and the investment community that saw ESG as an important consideration. Many of today’s green and sustainable products are on a pricing par with others, while investors are shying away from companies that put them at risk. ESG has evolved into a program that is about doing the right things for sound business reasons.
The time may soon come when every business will need to adhere to ESG practices. Even if ESG never becomes a mandated set of guiding regulations in your particular industry vertical or geographic region, you can’t go wrong by doing what’s good for the planet, your employees, their families and the community. It’s today’s primary reason to adopt and abide by the guiding principles of ESG.
ESG Data for Business Decisions
Your ESG strategy should focuses on improving your business and look beyond the mere gathering of regulatory metric data and results reporting. If you’re putting time and money into ESG, then it only makes sense to think about it in terms of creating a program that gathers and uses as much data and information as you can collect to make educated business decisions, move your company ahead of the competition and take it to new places. It is widely accepted that both a strategy and an execution plan are needed to be successful in achieving your ESG corporate mandate.
Treat your ESG program as something that’s constant and evolving and brings continual benefits by using information and data to help your company achieve things such as improving its supply chains and overall performance. It will lead to more financial investment and more people buying your products. Materiality assessments can provide data-driven information to identify risks and opportunities within your ESG Program.
Don’t make the mistake of being shortsighted by thinking of ESG only as a way to meet regulatory targets and produce necessary reports. The C-suite also needs to be your primary focus for ESG data gathering and reporting because the information you collect can help with their business decisions. In fact, ESG thinking is moving in this direction, but some will need to learn to crawl before they walk and to walk before they run.
Inform Your Senior Leadership
ESG managers need to establish strong communication channels to senior leaders and board members. View it as an opportunity to enhance your value by looking through your ESG data for information you believe can help your business be better. Take the time and initiative to prepare a summary or report of that information, even if it’s not being asked for. Don’t wait for people to tell you what to do. Trust your experience and knowledge and be proactive. Remember, there are things you know and insights you’ll gather as you continually collect ESG data. Your next move should be to arrange a meeting with senior leadership to share your thoughts and engage in a conversation about your ideas and observations that could benefit the business.
Use the technology and tools available to help you collect data and information to create insights. Consider that data-driven information is always the differentiator in helping you and your business leaders understand how the company is reacting to changing market conditions. Refocus, if necessary, to explore new growth opportunities and how your company can be an attractive investment target.
Intelex ESG Management Software provides the transparency and cross organizational visibility needed to truly gain insightful ESG intelligence, provide timely stakeholder communications and disclosure reporting and focus on key ESG and sustainability performance improvement areas.