Starting anything new can be daunting, especially if you have no support or guidance on how or where to start. Nike became internationally famous for its slogan "Just Do It" not only because it's catchy but because it rings true. The best way to start any new endeavor is to simply do it. This article will guide you to get started on your ESG journey, showing you how to take the first steps of the process of improving your organization’s sustainability.
ESG is an acronym for Environmental, Social and Governance. Here’s a summary of what each initial means.
E – Consider the environmental impact of your operations. Measure and manage the energy, water, and waste your company is consuming and/or producing. For example, if you are manufacturing clothing, or your supplier is, you need to measure and report the resources needed to make your items, and any pollution their production causes.
S – Consider the social factors in your operations. Unless your company is 100% electronically managed and operated, you should consider all people affected by your company, including employees, contractors, and the surrounding community. These factors include, for example, the compensation of employees, their satisfaction and safety on the job, their data privacy and protection, and how the larger community is impacted by a company's operations.
G – Consider the governance of your organization from the top down. The way you govern your organization should be reported. For example,what is your board composition? Is it diverse and inclusive? Do you conduct regular audits? Do you have policies in place to prevent bribery? What are the procedures of due diligence? Do you protect employees and suppliers with a whistleblower policy?
Once you understand your company’s relationship with ESG factors, you can begin to describe your organizational structure and operations. You may consider changes which may impact your sustainability. The point is to bring ESG reporting into practice and to improve outcomes going forward. Studies show that 88% of consumers will be more loyal to a company that supports social or environmental issues. Here are some examples of steps you can take:
Implement periodic employee satisfaction surveys, at least annually. These will help you understand your employees' likes and dislikes about their work environment. This information will inform you on what may need to change to make your employees more productive, more engaged with their jobs, reducing turnover. According to Quantum, "organizations that survey annually see a 2.5 times greater increase in employee engagement".
Conduct supplier audits regarding ESG to understand how your suppliers manage their organizations. Open a dialogue with your suppliers to encourage them to be more sustainable. A cooperative audit can create greater trust and prove to be a win-win for both parties.
Review your company's mission statement and vision documents to align with sustainability values. The organization’s leaders should articulate its intentions and purposes clearly, committing to reporting regularly to employees, customers, and suppliers. The likely outcome is higher ESG ratings.
You cannot implement a comprehensive ESG strategy all at once, nor should you try. ESG is, in fact, a journey which best starts with one or more concrete steps.
Measuring and reporting your efforts is a good habit to establish. The acts of research and reporting allow you to tell your story, increase transparency and build stakeholder trust. For example, according to Ai Multiple, "In 2019, 90% of S&P companies published their environmental social and governance (ESG) reports. According to studies, a well-prepared ESG report with a valid action plan is more likely to increase your sales, capital inflow, your probability of hiring top talent, having government support, and reducing variable costs." (2)
Where you start your ESG journey is up to you. A few small steps can get you rolling. Establish a code of conduct for your suppliers. Create an open-door policy for your employees. Join educational ESG webinars. Seek a consultation with a professional in the space. Take your time to understand what ESG is all about. What matters most is getting started.
At Global Imprint, we’re here to help you make sense of the ever-evolving ESG landscape. Reach out to our team to set up an introductory call or complete our ESG Readiness Survey to get your ESG baseline.