By Phil Molé
VelocityEHS recently held a virtual conference on Environmental and Social Governance (ESG) which included many presentations to help EHS professionals and business on their ESG journey. During the conference, Brad Micheel and I presented “Practical Steps to Implementing an ESG Program,” about the reasons for the increased industry focus on ESG, and the practical steps that EHS managers and company leaders can take to begin their ESG journey.
In what follows, we’ll discuss some major takeaways from the presentation, and share some additional ESG resources.
How to Begin Your ESG Journey
Many EHS professionals know that ESG is getting more publicity than ever before, and that the attention stems in large part from data showing that ESG approaches pay off – quite literally. For example, a Harvard Law School study found that businesses with higher ESG maturity not only are more profitable, but have less volatility in economic performance. These traits make these companies very attractive to investors as well. Even so, many EHS professionals or business leaders struggle with figuring out where to start.
There’s no single “right” way to organize your ESG journey, because every company is different, and differences in business operations and company leadership understandably lead to different strategies. But with that in mind, let’s review some general strategies that all businesses can use as they structure their own approaches to ESG.
Assess What Matters: This is a good overall priority for your ESG journey, because every company is different, and the issues most impactful to you won’t necessarily be the most impactful for all businesses. For instance, a business that doesn’t produce much waste won’t find waste management to be as big of a material challenge as a large manufacturing company that may produce many tons of many different waste streams. But this points to an important caveat, which is that we do need at least some metrics and measurements as a baseline to be able to do our initial assessment, and we can then revise our assessment as we collect more metrics.
Identify Risks and Opportunities: I use the definitions of “risks” and “opportunities” given in ISO 45001, the global standard for occupational health and safety (OHS) management systems. “Risks” basically represent a potential for something bad to happen, combined with the severity of the outcome if it happens. “Opportunities” are ways we can further improve our safety performance. We need to not only take a broad view of risks (not just safety and environmental risks; financial and reputational risks as well), but also be proactive in pursuit of opportunities for improvement.
Develop Your Objectives: Here’s where we do an honest assessment of where we are today as related to ESG, and where we still want to go. You’ll also need to think about what additional resources, including software, necessary to complete your goals and track your performance.
Build the Business Case: This is something you may need to do in order to convince stakeholders to follow an ESG approach in general, as well as to build support for individual ESG-related projects, such as an energy reduction project.
Choose Your Metrics: There are many metrics you can measure, but it’s important to choose the metrics you need to measure in order to make progress. This means that your choice in metrics should come directly out your assessment of the issues that matter most to your business, and on your ESG objectives.
Include Some Leading Metrics: A good definition of a leading metric is “a metric that is predictive of, and strongly related to, the accomplishment of a major objective”. The idea here is that leading metrics are important because if we’re only tracking our goal, we’re not tracking the activity that leads to us achieving the goal, which of course makes that achievement much less likely.
Report Your Metrics: Of course the purpose of metrics is to give you the information you need to improve your performance. And increasingly, companies need to externally report their ESG data via frameworks such as Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB). You need ways to access and share your data more easily in this era of increasing transparency.
Improve Data Security: Data security is a key part of how well a company is managed, or governance– the “G” in “ESG.” It directly affects the level of risk to the business to data loss and cyberattacks.
Fix Your Culture and ESG Programs: Governance is a huge part of ESG, because having the right buy-in from your company leadership or board of directors determines what is possible for you to do, and company leaders model the priorities we’re looking to establish throughout our organization. The key takeaway here is that the best-conceived plans in the world won’t bring sustainable progress on ESG unless you have the right culture. Programs are about doing the right things, but good culture is about doing the right things every time.
Of course, at each point along your ESG journey, you also have to make sure you’re keeping up with your EHS regulatory requirements and basic environmental and safety management tasks. If you fall behind on the basics, you’re not going to be able to sustain your focus on ESG. That’s why the VelocityEHS Accelerate® Platform is especially useful, because it gives you a single system for managing EHS tasks along with important elements of ESG, so that you can maintain a consistent and unified management approach.
Looking for More Information?
If you’d like additional ESG resources, we’ve got you covered.
Webinars
Now that we’ve given you a taste of the content for our “Practical Steps to Implementing an ESG Program” webinar, why not check out the full presentation recording?
Watch “Practical Steps to Implementing an ESG Program”
While you’re at it, don’t forget to check out all of the other great presentations from the virtual ESG conference. For your convenience, individual links are provided below.
Watch “The Value of ESG to the Financial Community”
Watch “EHS to ESG: Making the Pivot”
Watch “Practical Steps to Implement an ESG Program”
Watch “ESG Horizon Planning: What’s Happening?”
Watch “Embracing ESG into A Company’s DNA: CF Industries Case Study”
And if you’re still looking for more after that, please feel free to check out our on-demand webinar “ESG: What You Need to Know Now” for an overview of what ESG is and how you can begin shifting your management strategy toward an ESG focus.
Customer Success Videos
Listen and learn from Kelvin Roth of CF Industries in this series of four videos, as he describes how the VelocityEHS platform has helped his company master their EHS tasks so they could progress in their ESG journey.
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