How do you start your ESG journey?

Everyone, it seems, is talking about ESG and sustainable development. Intuitively, it is recognized as a good thing but what does it mean? Just where do you start? There are a bewildering number of metrics, indices, KPIs, tools, funds and jargon. For a business thinking about managing their ESG performance it will feel daunting. Turning to the ‘Google’ for help just yields an avalanche of articles that it would take a lifetime to read. However, if you have found your way to this page, help is at hand.

So, the first question to ask is: Why are you interested in improving you ESG performance? What are the external drivers that are forcing you to look into this? To put it simply, who cares? Who are your stakeholders and what do they expect of your organization?

It maybe that you are seeking investment funds or trying to pre-qualify for a large bid. Or it may be that you have customers or board members who are scrutinizing your operations. In either case, it is good to have the conversation and start exploring the better question, “What does good ESG performance look like to you and how will you measure it?” It may be that the answer is prescriptive, specific and standardized, or it could be more open ended and less precise. But most importantly, the answer will give you a place to start your ESG journey.

To open a dialogue on the subject, start by exploring “what is important to us as a business?” Further, think about: what can harm your business in terms of ESG. For example, do a self-check on the worst possible offenders, things like poor corporate culture, less-than-stellar reputation, financial loss, supply chain liabilities, operational inefficiencies, emissions, waste, discharges, compliance issues and questionable integrity. Next, identify what can add to your business in terms of positive ESG benefits, for example, quality of materials used, expanding market opportunities, development of a strong and united internal culture, and tried and tested resilience to unforeseen events. In other words, evaluate both your risk and opportunity.

Then choose. Determine what risks matter most and what opportunities should be prioritized. Don’t try to change the world, but chose to address those risks and opportunities that can have the biggest impact if they are managed well. Keep the number of key issues to manage as small as possible to start. Although this depends on the size and complexity of your business, it may be as few as five to ten priority issues. There will be overlap with what other company stakeholders expect of you. Melding the external stakeholder expectations and your internal drivers will result in a consolidated and focussed list of aspects that you have to measure and manage in some way.

You will see that, so far, there is no magic and very little jargon. The real challenges lie ahead. In future blogs we will be giving you additional insights into how to organize your ESG journey. For now, remember to keep it pragmatic, relevant to your business, strive to add value through your choices, and establish the values you want others to recognize your organization for.