Grappling environmental, social and governance (ESG) planning can be an intimidating prospect. But with investors, employees and customers demanding ever-greater awareness of cultural, societal, and environmental issues, it’s time to take ESG off the back burner and make it a central part of your ongoing strategy.
From social justice movements to the climate crisis, rarely has headline news ever presented such disruption to commercial and domestic life. Burying heads is no longer an option, and embracing an ESG strategy is among the best ways to get ahead and sure up against a changing cultural landscape.
It’s worth remembering too, that a robust ESG strategy can do more than simply prove your social and environmental credentials. With a growing number of stakeholders actively seeking firms with an ESG-backed ethos, a fresh approach could help support your future ambitions for growth.
So, how exactly do you create an ESG strategy? And what should you consider before you start? Let’s take a look.
1. Understanding why you need an ESG strategy
In the past, ESG planning was seen as nice-to-have and dismissed by many as a buzz-affiliated strategy. But no longer. As awareness of ESG-related issues has grown, it’s become an integral part of ensuring long-term business continuity and growth.
Recognising this, and instilling it within your organisation, is an essential first step in developing a successful ESG strategy. Because if you, your business, partners, and employees don’t recognise the value of ESG practices, it will be almost impossible to generate the requisite level of buy-in to make a success of your ESG strategy.
Research the what and the why of ESG strategy-making and communicate this to the wider business. It’s vital that everyone is on the same page for the project to take flight and succeed.
2. Acknowledge the benefits of improved ESG
ESG planning is about more than contingency planning. Implemented well and it can bring tangible commercial benefit to your operations – something which could prove critical in attaining buy-in from senior stakeholders and the board.
For example, if you’re looking to grow your operations or expand into new areas and territories, a watertight ESG strategy could make you a more attractive proposition for potential investors. The savviest backers are looking to invest in firms with a clear, ethical, and future-focused ethos, so being able to demonstrate your ESG credentials is essential.
Elsewhere, an ESG strategy plays a key role in ongoing customer retention and acquisition, with the potential to help you reach a broad swathe of new customers, clients, and partners.
3. Defining your ESG strategy
While there’s no one-size-fits-all strategy for ESG management, most businesses base the framework of their strategy on a set of formalised guiding principles. Developed by non-profit organisations such as the UN and the Sustainability Accounting Standards Board (SASB), these out-the-box frameworks provide a useful steer for your own ESG strategy.
Generally, there are three frameworks to consider as part of your strategy research, including:
- UN Sustainable Development Goals – The United Nations list of SDGs is considered the most progressive and forward-thinking of all ESG-related collateral, and a great starting point for your strategy.
- UN Guiding Principles on Business and Human Rights – Going deeper, pay attention to the UN’s Business and Human Rights guidance, which is a more focused version of the SDG developed specifically for businesses.
- SASB Standards – Perfect for mapping ESG issues related to your specific industry, the SASB’s Standards offers a wealth of useful insights for those at the start of the ESG strategy-making process.
4. Setting ESG goals and objectives
What do you want to achieve as part of your ESG strategy? And what should the business focus on going forward?
These are questions you’ll need to answer while defining the objectives of your ESG strategy. Your goals ultimately control the scope and ambition of the project, so welcome input from all relevant stakeholders as to the long-term trajectory of the strategy.
While ESG strategy objectives vary between businesses and sectors, most firms seek to improve and optimise their operations in key areas, whilst also maintaining any positive aspects of their current output. This is why working from a defined framework can be useful – giving you pointers on areas of focus.
5. Gap and route to success analysis
What is currently lacking from your operational infrastructure that could hamper the progress of your ESG strategy? Are there any pain points that stand in the way of project success?
Performing gap analysis is a useful way to identify areas for improvement, places where you can implement practical changes and improvements that better support your ESG planning ambitions.
Assess each functional area of your business in turn, liaising closely with departmental managers and staff to get an overall picture of your operations. From here, you’ll be well placed to implement improvements and start working towards developing a fully defined roadmap for your ESG strategy.
6. Creating an ESG roadmap
A roadmap is the meat of your ESG strategy. It defines key action points, deliverables, workflows, and a phased plan of action, showing exactly how you’ll get from point A to point B on your ESG journey.
Drawing up a formal ESG strategy roadmap doesn’t only help define and bring clarity to the project, but will also help you attain the buy-in of key personnel and stakeholders whose support you’ll need throughout. With a point-to-point plan of action detailing how you’ll achieve each objective, it’s an invaluable document that you can refer to later in the campaign.
Close interdepartmental liaison is crucial here. Be sure to reach out to team leads and managers for their input, so that your roadmap offers a comprehensive vision of how you hope to transform the entire business.
7. Assembling an ESG delivery team
Before actioning your ESG strategy roadmap, assign a multi-department team to carry the project forward. Up to speed on all aspects of the strategy, and clear on the overarching goals of the transformation; they’re responsible for ensuring that the necessary steps are taken to drive your ESG strategy forward.
When assembling your ESG strategy delivery team, identify individual strengths and choose personnel of different ages, backgrounds, and departments. This multi-perspective approach will enrich the project with a whole wealth of ideas, takes and experiences, so you can affect genuine and meaningful change through your ESG offering.
8. Measuring the success of your ESG efforts
For an ESG delivery project to be successful, regular progress reporting and benchmarking are essential. You need to communicate the effectiveness of your strategy to key stakeholders and investors, while ensuring that the campaign is on track to meet your requirements, goals, and objectives.
Reliable and consistent ESG reporting relies on suitable KPIs and a modern data management infrastructure, such as ERP software. Keep track of all data and activity relevant to recently implemented changes to see how effective they are and adequately they’re contributing to the ongoing project.
Don’t get caught short when it comes to ESG planning. With a robust, clear, and measurable strategy, you can use environmental, social and governance to your advantage – achieving commercial and reputational gains while encouraging long-term growth.
We hope you’ve enjoyed this guide on things to consider when developing your ESG strategy. For more actionable tips and insights, click here to explore our tools and resources. If you need help with an upcoming project or would like to hear about our professional marketing products, visit the homepage or get in touch today.