ESG (environmental, social and governance) criteria have quickly become a standard tool for investors and the business community when assessing how well a business performs. The criteria helps stakeholders understand whether a business is successfully interacting with their environment and reveals the prospects of long term success and growth.
The global ESG market in Europe is worth USD $1.83 trillion and worth USD $304 billion within the US. Currently over 85% of US investors are looking at sustainable investments, ESG criteria is quickly becoming a global standard to understand whether a business is making strong and ethical long term decisions.
Top Tips for ESG Integration
Here are the best ways to introduce ESG strategy into an organization;
1. Introduce Sustainability into The Overall Business Strategy
ESG criteria cannot become important overnight within any business. The organization needs to prime stakeholders with the understanding that different activities not only have a positive impact on the business long term but on the environment and society as a whole.
2. Build Goals With Measurable Achievement
A data collection and reporting system help employees understand whether their actions meet the overall business goal of sustainable practices. Ensure ESG goals are introduced with a method to measure progress.
3. Practically Innovate
Encourage stakeholders to offer unique methods the organization can implement to reach ESG goals based on how the business practically operates.
4. Understand What ESG policies Work For The Business
In order to successfully integrate ESG strategy into a business; social responsibility, sustainability, inclusivity, environmental consciousness and compliance measures (amidst others) must sit as a keystone of an organization’s structure.
This means understanding existing policies and industry norms and adapting the same into the business at a grassroot level.
5. Explain the Big Picture to Employees
Employees may find the new methods tedious to execute. Businesses must walk employees through how their day to day activities help positively impact environmental, society and governing policies. This helps add deeper meaning to the activities completed every day. It is not just about achieving business goals, it is about using business as a tool to improve the quality of life as a whole.
6. Ensure All Stakeholders Consider ESG Factors
The business must assess how output is created from start to finish. As raw materials, suppliers, distributors and other key stakeholders must conduct their activities with ESG compliance in mind. This helps build a strong and consistent ESG compliant framework.
7. Support Policy Makers
Businesses can use their reputation and resources to aid the campaigning efforts of local and international policy makers. This allows businesses to help contribute to ESG causes such as paperless offices or tree planting efforts to positively contribute to environmental sustainability.
Additionally, offering support to government undertakings help businesses gain a more favorable stance around opportunities and subsidies.
8. Introduce Technology
Technology today works to enable businesses to reach their goals, including the ones built around sustainability. The initial investment strongly pays off long term with more efficient and effective tools to execute activities. The optimized results showcase themselves with lower utility costs and unwanted waste while conducting the same activities faster and with higher accuracy.
ESG factors are important to all businesses regardless of industry. Building a strong community within an organization’s field to help standardize better practices and drive change makes it easier and creates a need for a business to change their approach to sustainability.
10. Introduce Circular Methodologies
Circular business models ensure output created can be used for as long as possible and is retained within a high value state. Introducing circular systems across the organization helps minimize unnecessary resource use, waste and other undesirable side effects of output production.
Environmental, Social and Governance criteria can be easily integrated into Business Strategy if the concepts are introduced at a fundamental level with an explanation. Change can be difficult to adopt if stakeholders are unable to see meaning or better results.
For organizations unsure about how to achieve this, there are a number of ESG Consulting Firms offering customizable ESG services. This helps a business introduce the best practices based on how the business functions and what can realistically be adopted. Pivoting now can help businesses stay competitive long term.