How to transition to corporate sustainability
Corporate sustainability is upon us and changing the way businesses operate – from hiring practices and attracting capital, through to waste management. In light of the global trend toward sustainable practices, companies are no longer measured purely on their financial output; they are also measured by Environmental, Social and Governance (ESG) performance indicators. An ESG strategy not only makes a sustainable business model tangible and measurable, but it allows a company to keep up with competitors, align with stakeholder interests and prepare for long-term success. Simply put, an ESG strategy is increasingly synonymous with corporate success.
Preparing for the transition to a sustainable business model may seem like a daunting task, but with quality corporate ESG training and a well-implemented plan, the transition can provide opportunities for innovation and growth.
Step 1: Identify material issues and define ESG
The first step in preparing for the transition into corporate sustainability is understanding your organisation's values and what ESG will look like for your company. Once ESG factors are defined, material issues can be identified through a collaborative process between an organisation and its stakeholders. Material issues are the environmental, social and governance factors that will influence your organisation's operating performance or financial condition, and include issues like carbon emissions, labour management or board diversity for example. However, material issues will differ from company to company based on what will have a real and measurable impact on a specific business.
Step 2: Put governance structures in place
Implementing a sound governance structure is foundational to reaching ESG targets. A governance structure clearly defines decision-making and enforcement policies and will ultimately dictate how a company or organisation functions. It reduces risks and helps companies and employees stay committed to ESG goals by demonstrating that policies and procedures were carefully considered and reinforced. Factors that influence a governance structure include mandatory and voluntary ESG structures, budgeting, number of employees and reliance on outside partners and deadlines.
Step 3: Set a measurable strategy
Transitioning to corporate sustainability requires setting ESG goals with clear, measurable targets and metrics. Before setting targets, it's vital to establish your company's ESG baseline, to identify which issues your company should focus on. ESG targets will be driven by company values and material ESG issues, but it can also be helpful to look around at the commitments made by other companies in your industry.
Step 4: Assurance and reporting
To keep your company accountable to stakeholders and pushing toward its goals, the implementation of an ESG tracking system is essential. When companies make long-range commitments, careful data tracking allows them to measure their performance against interim targets and adjust processes where necessary. Quantitative measures also supply data to back up a company's ESG ambitions, as well as document the journey.
Collected data will be shared publicly as a sustainability report, attracting would-be investors and allowing existing investors and stakeholders to challenge the current ESG strategy. Some businesses, depending on their capacity, may have their collected data externally assured whereas other businesses may simply present the collected data they have available.
Investing in ESG courses
The most fundamental tool in preparing for the transition to corporate sustainability is an ESG training course. Ensuring everyone on the team has the necessary skills and understanding to implement and carry out an ESG strategy is integral to its success. Corporate sustainability training will provide a solid understanding of key concepts in addition to cementing the importance of quality ESG data and how to interpret it. Training will also clarify the need for corporate sustainability and how it helps drive performance by linking ESG values with systems, processes and company culture.
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