By now you’ve probably heard the terminology ESG, but what does that really mean? ESG stands for Environmental, Social, and Governance, and investors are increasingly applying these non-financial factors as part of their analysis process to identify material risk and growth opportunities. If this hasn’t impacted your company quite yet, it’s about to.
Here’s a closer look at each of the areas of ESG.
Environmental (E) criteria considers how a company performs as a steward of nature. Environmental criteria may include a company’s energy use, waste, water usage, pollution, natural resource conservation, treatment of animals, etc. Take a deeper dive into environmental criteria!
Social (S) criteria examines how a company manages relationships with employees, suppliers, customers, and the communities where it operates. Learn more about social criteria.
Areas it looks at include but are not limited to:
- Diversity, equity, and inclusion policies
- Employee health, safety, and wellbeing
- Pay equity
- Ethical supply chains
- Data integrity and cyber security
- Human rights
- Working conditions
Governance (G) deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights. It also examines diversity of board members, political contributions, internal corruption, lobbying, etc. Learn about the ESG ripple effect and the impact of governance criteria!
How Does ESG Impact Your Organization?
Ready or not, the ESG era is already upon us and growing in emphasis, and companies need to be prepared. In fact, 2020 and 2021 were historic years for their level of global regulation related to sustainability disclosure.
In the U.S., the Securities and Exchange Commission (SEC) is placing a large emphasis on climate change, human capital, board diversity, cybersecurity risk, and ESG funds as key issues for policies and rulemaking. And, as we all know, the global pandemic has brought to light the importance of the WHOLE employee, their experience with a company, and their overall wellbeing.
Due to all of this, the organizations, stakeholders, and investors you work with will begin inquiring (if they haven’t already) more and more frequently about what your organization is doing in regard to responsible business practices, how you treat your employees and vendors, your dedication to sustainability initiatives, and other activities that fall under the ESG umbrella. It’s essential to be able to talk with them about it and share your progress and results.
How Can ethOs Help with Your Company’s ESG Efforts?
While ESG is still evolving and quite dynamic, there are things your organization can do today to begin your journey.
At ethOs, we have a team of experts with more than 30 years of ESG experience who can consult with you, position your company to be ready and aligned with future ESG regulations, and highlight your ESG efforts to support the organizations, stakeholders, suppliers, communities, and investors you work with.
As part of our ethOs ESG Consulting Services, we’ll help you learn how to leverage ESG as part of your purpose, people, culture, brand, and overall value proposition. The first step in this process is to go through the following steps:
Discovery and Insights
We’ll take a look at your current framework, policies, and processes, while also discussing the industry, conducting a competitive review, and working through a client analysis.
We’ll help you better understand what ESG is and the importance of it for all types of organizations. This is important, as you likely work with many different types of organizations. This will include tailored education and training development for both your internal and external stakeholders.
Develop an ESG Team
We’ll work with you to identify individuals within your company who need to have a seat at the table when talking about ESG.
Conduct a Standard Assessment
We’ll assess the current state of your ESG framework, your company’s ESG readiness, and the potential risks for your company associated with not aligning to ESG standards.
Based on these results, we’ll then recommend an ESG reporting standard and an implementation framework.
Facilitate a Workshop
We’ll gather key company stakeholders around the table to go through a complete ESG workshop. We’ll discuss industry trend reviews and risk assessments.
Conduct a Materiality Assessment
We’ll walk you through a detailed materiality assessment. This assessment will help your company determine which ESG areas matter the most to you.
Develop an Enterprise Strategy
Finally, we’ll help you apply what you’ve identified as the most important ESG framework for your company to help strengthen your purpose, people, and culture efforts. We’ll also ensure your corporate initiatives are aligned to ESG, while also aligning each initiative with corresponding United Nations Sustainable Development Goals (UN SDGs).
Additionally, we’ll help you prepare your key executives for ESG subject matter expertise while exploring a Center of Excellence.
Let’s Enhance, Empower, and Engage!
Here’s the good news. Your company is already likely excelling in many areas of ESG, and you may simply not know it. Our goal will be to highlight those, help you expand upon them, and identify any new opportunities for you.
Our ethOs business is built on the foundation of helping you in all areas of your organizational and engagement journey. Reach out to us today for a consultation! We’re ready to help you with your ESG journey.