How Business Leaders Can Take Action On ESG

For years, corporate leaders have taken the spotlight to show tangible progress on environmental, social and governance (ESG) initiatives. Despite growing consumer demand for action and a spate of new corporate commitments, many business leaders still struggle to develop and implement ESG plans and track and measure success.

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According to our recent No Planet B study, 89 percent of respondents said it’s not enough for companies to say they prioritize ESG, they need to see action and evidence. Additionally, 96 percent of business leaders said they want to make progress on sustainability initiatives, and the vast majority (80 percent) remain frustrated and fed up with a lack of progress. Managing Director want face the situation and make further progress, but many do not know where to start.

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I recently sat down with Pamela Rucker, CIO Advisor and Instructor for Harvard Professional Development and co-author of the No Planet B study, to discuss how business leaders can turn promises and promises into action. Here is a summary of our conversation:

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What is an important first step for leaders on their ESG journey?

Pamela: The first step in making progress towards ESG goals is for business leaders to make time for regular meetings. Business leaders should establish an ESG working group, which meets quarterly and is composed of senior executives from all areas of the business.

This “ESG suite” ensures that in every area of ​​the company, leaders take responsibility and achieve results when it comes to the company’s ESG efforts. Without representation at the highest level, it is all too easy to sideline these goals despite the best of intentions.

How can managers get employees on board?

Pamela: Millennials and Gen Z will vote with their wallets and choose employers based on their values. Companies must make ESG a core competency of their organization and have a sustainability-focused culture as part of their operational backbone. Some examples of this are:

  • Engage employees and customers in authentic conversations about how ESG impacts them personally.
  • ESG coaches, advocates and sponsors work with employees to gain their buy-in to company goals.
  • Collecting ideas from employees and customers to improve ESG strategies.
  • Emphasizing the importance of ESG in corporate culture; Provide internal and external communications that support your organization’s commitment to change.
  • Give feedback that you did what you promised.

How should leaders proceed to set achievable goals?

Pamela: Leaders need to have pragmatic goals and benchmarks that are specific, measurable, and (most importantly) achievable. Leaders should begin by setting first-year goals that are achievable to show early results. Some examples of this could be:

  • Develop a net-zero carbon emissions target and implementation strategy by the end of the first year.
  • Working to reduce Scope 1 emissions under direct company ownership or operational control by 5 percent by the end of the year.
  • Implement “One Big Thing” (an initiative your employees care deeply about) in one year.
  • Work to make your profits more supportive of global change (give a small piece of an effort to make the world a better place).
  • Establish an effective governance strategy for reporting and disclosure of sustainability and climate risks.

Why is it crucial to have a single and clean source of data to make progress on ESG initiatives?

Pamela: 91 percent of executives surveyed said they face major barriers to implementing sustainability and ESG initiatives. Top challenges include sourcing ESG metrics from partners and third parties (35 percent); a lack of data (33 percent); and time-consuming manual reporting processes (32 percent).

Without a clean source of data, it’s almost impossible to accurately measure and track progress across an organization and find efficiencies that drive progress.

ESG data comes from many systems in your organization, e.g. B. from finance, human resources, supply chain and customer experience applications. With new technologies like embedded AI, these systems can become powerful recommendation engines that help create more efficiencies and reduce waste. Therefore, business leaders should invest in solutions that allow them to connect, manage and standardize data across all systems to improve planning and execution and provide accurate reports on progress.

For example, a company that manages supply chain data on the same platform as its financial data can reduce costs and carbon emissions by finding the most efficient routes and transportation methods. At the same time, these connected systems would be able to quickly report GHG Protocol Scope 1, 2 and 3 CO2 emissions to show the impact that increased efficiency in logistics operations had on ESG targets.

How can technologies like AI help companies make progress on ESG?

Pamela: Technology can now play a massive role in driving ESG efforts. In fact, 93 percent of business leaders believe artificial intelligence (AI)-based technologies would be better placed than humans to make sustainability and social policy decisions.

Leveraging AI and automation, executives can flawlessly capture different types of ESG data, reduce the time it takes to manually extract and analyze these key insights, better manage the complexities of integrating data across global supply chains, and uncover key sustainability insights that support their can increase competitive advantage.

This makes it much easier for leaders from all departments to work together, track progress and find clear ways to achieve their set goals.

How can leaders be more transparent about goals and share key milestones publicly?

Pamela: In order to mobilize large-scale organizational change, accountability is required. Being transparent with goals means communicating clearly and publicly where your organization currently is, where it wants to be, and the specific steps it is taking to get there. Increased transparency creates a strong sense of responsibility and helps to close the gap between intention and result.

Even if an organization falls short of certain goals, business leaders should still be clear to stakeholders and customers and use those missed steps to reflect on what needs to change. When important milestones are reached, that too should be shared and celebrated! Recognition of this type of accomplishment will add momentum and generate additional enthusiasm to achieve even better results.

On the way to a place of progress

We all have a role to play in driving our organization’s ESG efforts. By establishing an ESG suite, engaging employees, setting clear goals, having a single source of data, tapping into advanced technologies, and striving for transparency, leaders can truly make ESG a priority and accelerate progress.

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