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How can you make sure your ESG strategy makes a difference?

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Ted Dhillon is the CEO and founder of FigBytesan ESG insights platform.

Environmental, social, governance (ESG) is trending – so much so that a record $649 Billion Deposited into ESG Focused Funds worldwide in 2021.

With stakeholders looking to invest in companies that have sustainability plans, more and more companies are jumping on the ESG train. But are these companies making a difference, or are they greenwashing or purpose-washing, making big, long-term commitments without concrete short- or medium-term plans? Now the SEC in America and the Federal Government in Canada take steps to require listed companies to disclose their climate-related risks.

Purpose washing can easily happen when companies get caught up in the hype of ESG. It’s not about creating dazzling campaigns. ESG is a data-driven approach to sustainability that has the power to drive positive change for both people and planet. So, how do you ensure your ESG plan delivers on its promises?

An effective ESG strategy can be reduced to these three elements: setting goals, tracking your progress and taking a holistic approach.

1. Set goals for your industry, not others.

The most frustrating thing about ESG is that there isn’t one right way to go about it. The objectives differ from company to company. The one common denominator? Strategy.

Start by considering what makes sense for your company’s goals and mission. The goals of an oil and gas company will be very different from those of a small retailer. Just because companies love Coca-Cola commits to achieving net-zero emissions by 2040 doesn’t mean it’s the right target for your business.

Look for sustainability areas relevant to your industry. The SASB Materiality Finder is a great place to explore new and ultra-specific concepts.

Managing your emissions is a big step in the right direction, but carbon is not the only hurdle we have to overcome. What if your company is involved in the production or extraction of minerals? Water management should also be part of the plan. Fracking, mining and other energy-related activities suck up a lot of water.

Remember to be realistic about what is achievable for you. Which KPIs can you measure and manage? What are some ways to improve your energy efficiency now? This is not to say that your goals should not be ambitious; in fact, aggressive targets are what the world needs now, according to the latest IPCC report† But the goal is to actually make progress toward them.

If you commit to net-zero emissions by 2050, set realistic goals with specific dates along the way. Can you find a supplier that uses alternative fuel vehicles? Sometimes small wins can set the pace for a successful ESG program and create the buy-in needed to achieve bigger goals.

By setting big goals and then breaking them down into smaller chunks with timelines attached, companies can assess their progress on the sustainability journey.

2. From disinformation to data, track your progress.

A cloud content delivery platform came to us looking for help in achieving the 50% renewable energy target. But with more than 4,000+ data centers in 130 countries, collecting data was quite a challenge.

By implementing top-down guidelines that mandated tracking energy data and converting it into greenhouse gas (GHG) emissions, we were able to help the platform significantly reduce computation time. This made it easy not only to show progress in real time, but also to engage stakeholders with data-driven information.

Operational data helps you understand your impact today and can help you see the changes you need to make to achieve your goals tomorrow. Net zero carbon emissions by 2050 targets must have waypoints along the journey – you must have the ability to monitor your progress. Determine your CO2 emissions today and determine the next steps from there.

Different companies may have different goals, but each approach must be data-driven. By looking at the bigger picture and then tracking, recording and reporting on these sustainability initiatives, companies will get a better idea of ​​what their true impact is on the world. Only from there can they set attainable goals for themselves.

3. Don’t forget the ‘S’ and ‘G’.

Are ethnically diverse companies outperform less diverse companies in their industry. In addition, 78% of employees say: it’s important to work for an organization that prioritizes DEI– so in terms of talent retention alone this is worth pursuing.

A diverse team adds value to your organization, be it geographically, per industry or beyond. Diversity helps leadership see challenges through a broader lens and supports finding a more sustainable solution for the company’s long-term success.

While the social aspect can be trickier to navigate, there are several ways to make your business more diverse and equitable. One way to ensure diversity in my company is to rethink recruitment. We started by removing unconscious biases from the hiring process. We began to consider more heavily transferable skills; candidates from diverse backgrounds often bring valuable perspectives to the table. We also value soft skills more: members of your team must be able to think and communicate as well as manage budgets and projects.

By establishing a holistic set of goals in your mission statement, your business is sure to not only engage talent and stakeholders, but also have a real impact on the planet.


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