A practical guide to integrating ESG
Updated: Nov 2, 2022
How can companies embed ESG into their strategy?
It is no longer enough to tell a good ESG story.
And companies need to get ready for it.
Hans - Kristian Bryn and Carl Sjostrom invented one model to help companies see the whole picture of how ESG blends into an organization's strategy. It is the integration of ESG into the ownership form, the organization's purpose, the culture, and structure that, in turn, led to ESG incorporated behaviors.
One thing that needs to be emphasized here is: Sustainability is a journey, not a destination. Everything that might be right at once time can turn upside down. Everything is a learning process and there is always room for improvement.
Another guideline that I found highly practical for companies to embed ESG is the Assent ESG Questions which include 4 pillars of ESG management: Strategy, Data, Reporting, and Engagement.
If companies manage to answer these questions, they are already halfway to having a successful ESG journey.
Let's use the 5Ws plus 1H to solve this puzzle.
1. Formulating your own ESG strategy
Why does your company need to tie ESG into corporate objectives? - It is likely that ESG will die out if it is not under the corporate vision/mission umbrella. Companies need to provide relevant, real-time connections and transparent ESG in order to succeed in their overall goals.
What is the most impact company have on each E, S, and G topic?
Who is interested in ESG strategy? What are they interested in? - Draw your stakeholder profiles.
What commitment have you made to your stakeholders? - Obviously, this is the whole picture of commitments, goals, objectives, and timelines to implement.
How can your company share your strategy with your audiences? - Based on your stakeholder profiles, build a matching communication channel for them.
How can your company measure and monitor ESG strategy? Key points here are bench-marking against commitment and real-time data with clear and accessible communication.
2. Managing your ESG data
Why is data important for your company's ESG strategy? For a long time, companies get comfortable with the disconnected system and manual process, leading to time-consuming and resource waste. But this style no longer works in this era.
What data is needed and what makes good data? Companies need to pick the right tools. Data needs to be relevant, timely, and qualitative or quantitative support
Where can your company get this data? Within your company or outside your company? Of course, both of these sources. Companies need to build a data system that allows all employees to access and generate data, at the same time, leverage technology partners and sector public data.
How can you make data work for you? AI and big data are the answer.
3. Reporting on ESG
Who is in charge of your ESG performance and reporting? The role needs to be clear to avoid Moral hazards.
What report framework is right for you? Check out the differences between reporting frameworks Here
Where does your company position itself? If you are new in this journey, it is highly recommended to have a bench-marking point either over sustainability leaders, industry peers, or competitors. Bench-marking will clear your ESG map to gain competitive advantages.
How often should your company report on ESG? There is no direct answer to this question. But it is always a good idea to conduct an ESG assessment and report on its topics on going basic with the timely reflex the latest report regulation changes.
4. Bring your stakeholders closer.
What is the relation between data and stakeholder engagement? The story of data, storytelling, engagement
Where can your company share the results and to whom? As you have already identified your stakeholders and their preference interests, you need to decide where to engage them in ESG reporting. Is it better to share with them over the company annual report, or via the company website? Is it a good idea to combine ESG into other reports or have a separate report on ESG? Each of the channels has its own pros and cons, so choose them wisely.
How can your company empower stakeholders to share your ESG story and be your ambassador? Don't stop the engagement process at some stakeholder meetings or conferences. But rather, go further to make your stakeholders advocate for your ESG story.
Reference:
ESG Today: https://www.esgtoday.com/
ESG integration model: https://sustainabilityunlocked.com/
ESG Practical questions: https://www.assent.com/
SASB Implementation primer, https://www.sasb.org/
