Alicia Silva
President
Sustentabilidad para México SUMe
/
Expert Contributor

Starting a Successful ESG Journey

By Alicia Silva | Thu, 05/26/2022 - 09:00

The COVID pandemic has transformed many aspects of how we work and how companies and their stakeholders approach different issues. The transformation of people has been amazing and conscious consumerism is on the rise, as are conscious investors and lenders.

As a result, many companies are pledging to decarbonize, reducing their environmental impact or committing to net zero.

Several frameworks can help with these pledges and commitments and it is important to understand that each company needs a unique plan that reflects its values and priorities and adds to its triple bottom line: people, planet, profit. Companies are understanding ESG as a safeguard against risks and for future-proofing. A clear plan can even keep activists at bay, demonstrating the companies’ commitment to the most important aspects of a functional society by using business as a way to help address and solve environmental and social concerns.

Here are three key factors to start a successful ESG journey:

  1. The team. Start with the basics. While material assessment is the first step, selecting an internal team or an external consultant is a must. Creating reports is easy when you know the content. Hire people who are expert in environmental matters, another team might be expert on the social, compliance and governance sides. Pay attention to people who have done the work, not just someone who can write reports. Some companies have different consultants for every aspect and someone inside to coordinate it all.
  2. The plan. How to implement a successful plan that really addresses what is needed is different for every company. Also, there are several frameworks that can support the plan and every industry has some that are more compatible to its needs, so make sure you select those that are relevant to your investors and the company’s market. These are among the most well-known:

So, select at least one to start the journey and make sure you consider different aspects that complement your plan.

  1. The implementation. For a good implementation, you need a team that knows how to get their hands dirty. Some companies make mistakes through decisions taken from a desk without the real experience of how things work within the company’s processes. Companies need different tools to measure their goals, such as data management platforms, certifications and legally binding guides and protocols. Selecting the tools correctly will lead to a better outcome.

To ensure a successful strategy, it is necessary to keep “ESG washing” at bay; companies that report things that are not consistent will turbocharge skepticism, so be extra careful with commitments and reporting. This is important to demonstrate credibility and to see the real benefits of ESG reporting.

While ESG is a powerful tool, every company has to be careful with its implementation to make it as successful as possible.

Every journey is different; however, we all want to contribute as companies to a better future for all our stakeholders, including the Earth.

Photo by:   Alicia Silva

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