Four questions to ask as you craft your ESG strategy
A recent EY webcast, ESG in real estate: opportunities to create long-term value in a time of uncertainty, revealed four key research questions that are commonly used to construct an ESG rating:
1. How does your company tackle new initiatives?
As with any strategic change, there needs to be support from the top to get buy-in from the rest of the company. If the board and management team have a history of transparency and clear communication to employees about how and why things are done in the business, the path to implementing an ESG program becomes easier. In a situation where that’s not the case, leadership will need to work harder to make its case and garner support.
2. What specific ESG risks or opportunities does your company face?
This is going to be different for each industry. What’s relevant to a real estate company is much different from what matters to an energy or a pharmaceutical company. Take the time to assess where your company is strong in terms of sustainable business practices and where you may have fallen short. If you find that you’re not where you’d like to be, don’t be discouraged. You’ve taken a key first step by revealing your weaknesses.
3. What is your company saying about these risks?
It’s one thing to talk about making changes and addressing problems. But what happens when the all-hands meeting is over? Leadership must have its finger on the pulse of the workforce through employee engagement surveys and other real-time measurement tools. Conversations should continue in breakout meetings and correspondence that furthers the dialogue and brings the company closer to solutions that can resolve these concerns.
4. What is your company doing about these risks?
Consider the steps that have been taken to act on the programs being implemented and evaluate the results of those efforts. You may have a policy that appears to be comprehensive, but having a clear picture of historical trends, the ability to evaluate the outcome of your efforts, and ways to measure the effectiveness of your strategy is critical.