ESGmark: how to balance ESG with P&L
Public expectation for how the corporate world interacts with the environment and society has evolved from damage limitation, to positive contribution.
Keeping your business relevant and competitive, and your products and services desirable, means engaging with the growing momentum to meaningfully contribute to the world around us. Importantly, your employees need to be fully invested if you are to successfully take your business towards a genuinely environmental, social and governance (ESG) friendly agenda, says Julia Fawsley Grant of ESGmark®, a community which brings together responsible businesses and organisations.
5 pointers to successfully embed ESG from the C-suite down
Leadership. There needs to be someone leading the charge to improve your organisation's ESG credentials. Internal messaging needs to be spot on. Determine what is your organisation’s new ESG policy, why are you rolling it out and what are your goals? The policy should be positive in mission and unambiguous in aims. Crucially your senior leaders must be Cheerleaders-in-Chief.
"The policy should be positive in mission and unambiguous in aims."
Un-silo ESG. Very often initiatives for positive change are either left to volunteers juggling their full-time job, or to a dedicated resource kept separate to the rest of the company. ESG projects, isolated from everyone else, become 'extra' rather than a critical part of responsible business. Uncoupling business responsibility from core activities leads to ad hoc initiatives that leave swathes of the wider business unengaged. ‘Making a difference’ should be seen as a critical consideration into everything you do along your value chain, with every part of the organisation engaged.
Enable and empower. Decide how will you empower your teams to balance ESG with the P&L. The key to this is first recognising that strong ESG credentials can be a driver of profitability and can be valuation enhancing. Therefore, ESG projects should be evaluated for their ROI like any other project. Define your budget and allow colleagues to make decisions within given parameters.
"Strong ESG credentials can be a driver of profitability and can be valuation enhancing."
Metrics and reporting. Determine your metrics for measuring change. Working towards the triple bottom line of people, planet and profits means financial metrics alone will no longer be the ultimate objective. How are you integrating ESG into management reviews? How will you report your progress, and to whom?
The answers are up to you and have to be feasible to produce - reporting on your work should not get in the way of doing your work, but you do need to put measurement in place. If nothing else, if you are not measuring your impact then there is no way of quantifying whether your efforts are making a difference.
Education/Training. Engaging employees is vital as they have to be excited about policy change. Positioning what you’re doing as a win for everyone ensures buy-in at all levels - we’re all human. No one wakes up in the morning determined to underpay someone further down the supply chain. Also remember that ethical leadership needn’t be about life and death decisions; 'social' starts at home. How are managers and team leaders allocating work schedules? Are they modelling work/life balance?
ESGmark® recognises that embracing environment, social and governance best practice can seem daunting, but it really needn’t be. It helps organisations identify simple and actionable tasks to improve their ESG credentials and provides bespoke strategy solutions to businesses across all industries and sizes, to make sure they succeed, thrive and enjoy the journey.
