ESG Should Be More Than a Set of Specific Short-Term Goals
By Elaina Shekhter, Chief Marketing and Strategy Officer, SVP and Shamilka Samarasinha, Global Head of Corporate Social Responsibility at EPAM Systems, Inc.
ESG Should Be A Systemwide Approach to Sustainability for the Long Term!
Today, it is not only assumed but expected that businesses contribute to or implement sustainable practices. Socially responsible and environmentally minded investors use a model called ESG (Environmental, Social and Governance) to measure the sustainability and ethical impact of an investment. The ‘E’ specifically examines a business’ performance as a steward of the natural environment, focusing on areas such as resource depletion, greenhouse gas emission and deforestation. Considering a recent U.N. global climate science report, along with the workforce shifting away from Baby Boomers to Millennials and becoming more female, corporations will experience both external and internal pressure to change.
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How Should Corporations Invest in ESG Strategies?
CSR (corporate social responsivity) initiatives help companies build a positive brand image by publicly displaying their environmental and social sustainability work – however, it is ESG criteria that make those efforts measurable. Regrettably, there is often confusion around the uneven consistency of ESG factors used by mainstream investors, with much of the focus placed on ‘E’ over ‘S’ and ‘G.’ Nevertheless, corporations take CSR very seriously. Many have dedicated departments committed to sustainability, highlighting the necessity for standardized reporting practices in their ESG efforts through quantifiable metrics.
Despite the resources behind these sustainable projects, the results largely have little effect on core business functions. Sure, these CSR departments might accomplish some amazing feats – but is their work really changing things fundamentally? Corporations need to realize that sustainability must be core to their business strategy. The priority should be long-term system building instead of programs designed to meet one or two specific, short-term goals. Goals will change over time, but core systems will enable us to have long-term impacts on the overall corporation and the environment itself. Yet, it is easier said than done; putting a brand-new system in place requires significantly more money, resources and attention than drawing up a whiteboard of goals.
Some best practices corporations can make to safeguard sustainability in a way that is still affordable and attainable are by:
- Reaching out to their community to understand what they are looking for in a company.
- Having brand awareness of existing tools within the company.
- Bridging the gap from buzzwords, lip service and surface-level metrics to putting a plan into motion.
Reaching out to the Community
While public opinion is moving towards sustainability, getting consumers to jump on board can be challenging without knowing how they think. A global software development leader helped its partner, a yogurt packaging company, research consumer’s views on biodegradable packaging. First, the software developer defined the community – households of yogurt-eaters living in the west. Then, from analyzing their findings, they discovered that about 47% of people would pay 10% more for sustainable yogurt, while 22% preferred to continue paying the same price. Additionally, the results showed that 20% of people would be willing to eat the package itself, and 20% would be open to repurposing it. With this data, the yogurt packaging company could begin preparation for long-term system change.
Utilizing Tools that Exist Within the Corporation
Plastic is contaminating everything, including our drinking water and food. Realizing this crisis, a digital wallet and mobile platform startup company wanted to replace physical plastic credit and debit cards with a digital alternative. By taking the proverb “don’t reinvent the wheel” to heart, the previously mentioned software developer utilized data systems, which it had already created five years prior, to help the digital wallet startup. Before the project began, the software developer already had the resources required to build the standalone app. Despite the wide range of challenges stemming from the pandemic, they managed to finish the project in less than a year.
Bridging the gap by putting a plan into motion
An estimated 5 trillion plastic bags get produced annually, yet only 1 to 3% are recycled. Wanting to develop technology that could turn unwieldy plastic bags into more compact bricks to make recycling convenient, a company came to the same software developer with their solution. Although there wasn’t much beyond the initial vision, the software leader successfully managed to carry that idea from thought bubble to proof of concept to an actual working prototype in just four months. The result was a working prototype, which is currently transitioning into an Alpha prototype with plans to be ready for manufacturing later this year.
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From Short-Term Goals to Long-Term Systems
If we are to create eco-friendly corporations, we must think systemwide. Where in our organizations can we make significant shifts that become foundational to our core business and operations? In other words, we need to look at the way we work, including how we commute and how we contribute to our own communities. It goes beyond merely checking the ESG boxes – corporations must be holistically focused on sustainability.
Consider Adidas. Clothing and shoes are central to their business, so they figured out a way to bridge the gap between these lofty external ESG goals and literally bring them into the very fabric of the products by planning a long-term switch to use 100% recycled polyester in their products by 2024.
ESG systems, not metrics, must be central to corporate citizenship and social responsibility. Currently, there is ample momentum for corporations to change more than just a handful of processes, but entire systems, which investors and consumers will be thrilled to see and willing to support. And, just like the software developer, businesses must place sustainability at the core of their strategies to not only successfully meet ESG criteria but to truly make a difference.
About the authors:
Elaina Shekhter, Chief Marketing and Strategy Officer:
Ms. Shekhter heads up EPAM’s Global Marketing and Strategy, working to integrate a variety of functions that have a material influence on the company’s global strategy, positioning, and messaging. She has held a number of leadership roles within EPAM, including most recently as the Global Head of Business Development and, prior to that, as the Global Head of the Travel and Consumer Business. Ms. Shekhter is an advisory board member for the MACH Alliance, a group of independent tech companies dedicated to open, best-of-breed ecosystems. She is active in the software startup and emerging technology community, representing EPAM in its investment in the Go Philly Fund – to support regional venture funding for seed and early stage companies – and as a board member of the recent EPAM Seed Investment, Sigmaledger. Additionally, Ms. Shekhter take a special interest in artificial intelligence and sustainability initiatives.
Prior to joining EPAM, Ms. Shekhter was with the travel and marketing giant, Carlson Companies, in various Operational and Business Development roles, including Head of Retail and Entertainment for 24K, a spin-off of Carlson Marketing Group. Prior to Carlson, she was a leader with Ernst and Young Consulting, specializing in CRM and Analytics engagements for notable clients, such as 3M and GE.
Ms. Shekhter is a recipient of numerous professional achievement awards, most recently she was recognized by the Stevie Awards for Women in Business as Female Executive of the Year. And in 2019, Ms. Shekhter was named one of the Top 25 Women Leaders in Tech Services and Consulting,
by the Software Report, and received a Gold IT World Women in IT award. In her role as an executive Corporate Social Responsibility sponsor, Ms. Shekhter is an advocate and supporter of EPAM’s global education, environment, and community initiatives. She also helps foster a culture of growth
and talent development as an executive mentor and leader in EPAM’s diversity program, speaking frequently at many Women in IT events. Ms. Shekhter holds an MS degree in Information Systems and BS/BA degrees in Economic Theory and Political Science from The American University.
Shamilka Samarasinha, Global Head of Corporate Social Responsibility:
With more than 20 years of professional experience in the public and private sector, her expertise includes consulting, operations, leadership and account management. Prior to joining EPAM, Ms. Samarasinha served as a business consultant for corporate social responsibility at Brandix Apparel, a project manager for the British Embassy and county manager at Tesco PLC.
Ms. Samarasinha has a bachelor’s degree from Hobart and William Smith Colleges and a master’s degree from Leeds University.
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