How to Lead a Focused and Attainable ESG Program

By Charles B. Ammann, Executive Vice President, Chief Legal Officer and Chief Environmental, Social and Governance (ESG) Officer

The profile and scope of ESG programs across the enterprise has grown substantially over the past few years. Initially, it was driven by the urgent need to support global efforts against unsustainable material usage, energy consumption and carbon emissions, to name a few. However, more recently, the narrative shifted as the enterprise realized the broader business and financial impact these strategies can facilitate. In fact, McKinsey revealed that ESG strategies can affect operating profits by as much as 60%.

ESG is now at the forefront in terms of creating value for all stakeholders within an organization, from shareholders, to employees, to suppliers, to customers, and more. As a result, many companies are beginning to understand that ESG needs to be a focused discipline that connects to the entire operation – not an afterthought.

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The question is, how do we get there? Here are five ways that organizations can lead focused yet attainable ESG programs that positively influences critical business decisions.

1. Know your story and value:

Every organization needs to lead by answering this question. Why? When ESG first became a part of the national agenda, many businesses saw it as a race to get out there with a narrative, which in some cases led to harmful greenwashing. This helps no individual, no business and certainly does not help the environment. In fact, according to a recent survey by Google Cloud, more than 80% of respondents said that if business leaders can be more honest about the issues they face with becoming more environmentally sustainable, they can make more meaningful progress. So, take a step back, look intrinsically at how your organization positively represents ESG and how it enables customers to do the same, and you will find a strong foundation with which to build long term

2. Listen to your customers and key stakeholders:

At the end of the day, the majority of businesses run to meet the needs of customers and/or key stakeholders. Their challenges are your Their problems are (often) your problems. Their solutions are your solutions. The point of this – listening to customers keeps your feet on the ground. This is true for ESG too. It aligns with the first example listed above: overselling or misrepresenting solutions to the tune of ESG doesn’t support long-term sustainability and can harm relationships down the road. Also, if you’re keen listeners, you’ll find new ways to help customers solve for their challenges – ESG being one of them.

3. Build the right environment:

One of the biggest oversights when it comes to ESG programs is not seeking input from key stakeholders. Without this input, organizations risk not fully realizing the potential of an ESG program because its needs aren’t correctly identified from the outset. Different voices bring unique perspectives on what’s important to them, their area of the business, and their This level of ownership also motivates employees to participate toward the company’s ESG efforts because they’ve been a key part of it from the beginning. I recommend that ESG leaders put the right structures in place to ensure ESG visibility and buy in across the entire organization.

4. Leverage tools to measure success:

For all the positive movement ESG has made within the enterprise, measurement (where and how to measure success) remains a challenging proposition. We’re still in the early innings of truly comprehending ESG efforts, and so measurement might look different from organization to organization. Nevertheless, there needs to be goals and benchmarks that companies are working toward. Without them, progress can be difficult to understand. In the coming months and years, we’ll start to see guidelines and structures come down from governing bodies which will help unify and clarify this equation and allow for relevant comparisons.

5. Remain agile and flexible:

Remember that the role of ESG within the corporate world and within the broader enterprise landscape is evolving each and every day. ESG is dynamic, and so your organization must be too. As ESG matures, so too does the rules, regulations and guardrails around it. Yes, you need core pillars and goals to work toward as your north star, but that doesn’t mean the ways you achieve them won’t change. New challenges will present circumstances out of your control creating pressures. Customer demands will Ensure that you’re building checkpoints throughout the year to review ESG goals, how you’re tracking toward them, and build in room for flexibility as a part of these conversations. Don’t be disheartened amid this shifting sand. Remember who and what your organization represents, and that will guide you in the right direction.

The enterprise is well on its way in the journey to embracing ESG, and leveraging these initiatives to drive sustainable, resilient and reliable operations. We all must consider these as critical factors in any decision-making progress if we are truly to capture the generational opportunity in front of us.

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