Awareness around sustainability is greater than ever. Today, 70% of employees consider a company’s posture on social issues when deciding whether to stay in their current job and half of consumers think about sustainability when making a purchasing decision. At the same time, standard setters, governments and regulators are contributing to a rapidly evolving ecosystem, with new guidance and legal requirements emerging on environmental, social and governance (ESG) aspects. And institutional investors are following wider society in demanding that businesses help resolve societal challenges – and want companies to explain how they will deliver value to all stakeholders.
A “whole business” approach to ESG
So, how should you get started? Initially driven by external pressure to go greener, many companies focus first on ESG reporting and compliance. However, leading organizations are discovering ESG as a catalyst for rethinking strategic priorities, business processes, risks and opportunities. They understand the importance of a coordinated, strategic approach across people, processes and technology. They embrace ESG with a sense of purpose – and integrate it into their core business strategy and governance – to create long-term sustainable impact and financial value for all stakeholders. They also prioritize ESG at board level, sharing responsibility among the Chief Executive Officer (CEO), Chief Strategy Officer (CSO), Chief Financial Officer (CFO), Chief Operating Officer (COO), Chief Risk Office (CRO) and Chief Information Officer (CIO). This “whole business” approach covers six key areas: