We recently hosted a webinar on formulating and executing your ESG strategy.
More and more, we are approached by companies and individuals who understand what ESG is and why it’s important but don’t know what needs to done. There are too many frameworks to count, and the metrics that can be tracked are endless. In addition, ESG lip service is no longer enough, we are expected to deliver and hit the outcomes.
Our panel of speakers sat down to tackle this issues and shared some great insights on how to practically go about kicking off your ESG journey.
We’ve captured some of them below:
- Understanding and navigating the many ESG frameworks and reporting standards can be confusing; it’s important to remember that they largely serve as guidelines (although there are guidelines and frameworks starting to get adopted into legislation) to report on sustainability impact – and they exist to make the ‘what to report on’ and ‘how’ more manageable. Transparency is the ultimate aim and the underlying principle on which all frameworks and standards are developed.
- Good reporting should be underpinned by a solid strategy and not really the other way around. To really move the needle, you require an overarching set of focused objectives to build your efforts around. We see this as part of your sustainability strategy.
- Overall, the aim should be to get the sustainability strategy closely aligned to the overarching corporate strategy. The first prize would be to integrate the two.
- To formulate your sustainability strategy, we suggest that you follow a similar route to formulating a normal corporate strategy: start with your purpose (why you exist), set your ambition for the team (what does success look like from an ESG perspective), identify your key strategic themes required to move from the current state to the future state. This will then set the direction to start driving action.
- While everything is important, it’s not always possible and feasible to do everything at once. We, therefore, need to perform a materiality exercise to determine the initial focus areas for our organisation. We suggest two lenses to weigh up these focus areas: the likelihood to impact stakeholders that you’ve identified as key to your business; and the importance to the company (which could encompass a view of impact of risk and opportunity, your strategy, performance over time horizons and outlook).
- ESG targets are often far in the future, which is difficult to engage with as an organisation and team. We have to break up the long-term strategic goals into short-term goals, and a goal management methodology like OKRs can help. With strategy execution, we try to spot the principles that will lead to better execution. We have broken it down into three principles which can help guide you:
- Urgency: There is a need to create a sense of urgency. How do we create this? To ensure that everyone in the organisation can engage with the ESG goals, you need to make it relatable and tangible to everyone – OKRs help with this by creating tangible goals that people can engage with. We recommend to break down these goals into 3 month cycles to help create the sense of urgency around the immediate next step.
- Focus – we can’t do it all at once, there are a few things we can have an impact on. This is the difference between the ESG dashboard and effectively executing on our ESG strategy. Yes, track the metrics, how and what the business is doing etc., but then we need to focus on what are the few things we can focus on to move and shift the business in the short term. Focus on two or three goals that are within our circle of influence. Less is often more.
- Clarity – With all of the frameworks out there, it can become very confusing. In addition to this, things are evolving continuously with new methodologies and frameworks. So how do we respond to that? Strategy execution methodology is not a once-off event, it needs to be habitual. We need to create healthy business habits to re-assess our ESG strategy
- You can have a great ESG ambition, but Technology is the next layer. Any organisation needs to run the business whilst also changing the business. On the topic of changing the business: How does one translate the idea into a reality. You need to create vertical and horizontal line of sight to align teams and tech can help you. If done well, you will be able to create a common language, with data that is traceable, and be able to track progress against ESG targets. Technology can be used to translate targets and strategy to the rest of the business by working towards something that we can visibly see together.
Thank you to everyone who attended the webinar and to our speakers who shared their phenomenal insights.
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