ESG strategy encompasses more than reporting on DE&I statistics or setting a carbon goal.
You’ve likely taken some steps to make your business more sustainable – implementing recycling, reducing greenhouse gas (GHG) emissions, or introducing employee wellness initiatives, for example. You might also feel pressure from investors, employees, and customers to place greater emphasis on environmental, social, and governance (ESG) strategy. But what does that mean for your business?
When it comes to ESG strategy, your customers, your investors, and your business partners expect you to do something – but that doesn’t mean you have to do everything.
Looking through the ESG lens provides a more holistic view of your company.
ESG strategy deals with how environmental, social, and governance issues affect your business’s strategies and practices – and ultimately, your company’s value. So, what does each area cover? Here’s a broad breakdown of ESG, and the topics each category includes.
How business operations affect the environment (and vice versa)
How an organization's operations affect its people and communities
How a company behaves and governs
It’s important to keep up with evolving standards – and depending on where you do business, you might deal with any combination of these standard-setters (or others).
Maybe you’ve heard about the possibility of Securities and Exchange Commission (SEC) regulations on the horizon, or mentions of GRI and SASB standards – but who sets the standards, and how can they affect your business?
Global Reporting Initiative (GRI)
One of the most popular voluntary standard-setters, GRI enables transparency and open disclosure about organizations’ impact to help create a more sustainable future.
UN Global Compact
Largely focused on impact, the UN Global Compact is both a policy platform and a practical framework for companies that are committed to sustainability and responsible business practices. The Global Compact provides 10 principles, which are supported in further detail by the UN Sustainable Development Goals (SDGs).
UN Sustainable Development Goals (SDGs)
The UN SDGs are a set of 17 goals and macroeconomic targets that aim to promote sustainability, peace, and prosperity for people and the planet. The UN SDGs serve as the backbone of many sustainability and impact investing initiatives, such as the Principles for Responsible Investment (PRI) and the Global Impact Investing Network (GIIN).
Task Force on Climate-Related Financial Disclosures (TCFD)
Developed and supported by prominent U.S. and global business leaders, the TCFD provides a principles-based framework that enables more effective disclosures over climate-related risks and metrics.
Value Reporting Foundation (VRF)
The Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC) have combined to form the VRF, which focuses on disclosure of sustainability-related topics that inform value creation, preservation, and erosion. The U.S.-based SASB provides a practical set of industry-specific disclosure standards and materiality framework, while the U.K.-based IIRC provides a principles-based framework to enable Integrated Reporting Framework.
Standards, customer expectations, investor concerns – there's a lot to consider as you develop an ESG strategy.
Implementing sustainable ESG strategies, policies, and practices is not only a vital way to care for our people and planet, but is also an increasingly important factor in how your customers and investors are making their decisions. From products to services, people want to do business with companies that are incorporating responsible environmental practices, social strategies, and governance policies.
Source Global Research, a U.K.-based research firm, conducted a study among U.S.-based senior executives and found that while sustainability might not seem like an immediate need, it’s quickly becoming important to all of your stakeholders. When asked what stakeholder-driven factors will drive sustainability investment in their organizations over the next five years, the top three included employee pressure (54%), consumer pressure (50%), and investor and shareholder pressure (37%).
Whether it’s assessing your supply chain for human trafficking or making a commitment toward responsible investment, customers and investors don’t just care where their money is going – they care where your money is going.
Sustain.Life has aligned with Crowe to offer an effective software solution to seamlessly manage sustainability initiatives and goals.
Read the news release
Read the article
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ESG with a climate change focus: What insurers need to consider
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ESG, sustainability initiatives, and financial reporting
Navigating the landscape of ESG regulations
Internal audit’s new role: ESG sustainability reporting
The benefits of an ESG materiality assessment
Responsible Investment Forum
Daniela Arias will speak on building an ESG data plan throughout the investment cycle at the Responsible Investment Forum.
2023 Practical ESG conference
Chris McClure will discuss how to avoid corporate greenwashing in your ESG reporting at the virtual 2023 Practical ESG Conference.
Customers easily see through empty ESG initiatives – but you can make genuine and transparent changes in a practical, pragmatic way. Our team understands your specific industry needs and how they factor into an overall ESG strategy. Here are just some of the areas where we can help.
ESG due diligence
If you’re looking to acquire a company, this focused assessment can help you identify red flags, risks, and opportunities related to governance, human resources, environmental practices, and more.
ESG strategy road map
A customized road map can help you assess your current ESG strategy, identify gaps, and plan for your future. Once you’ve identified your goals and priorities, we’ll help you move from the “what” to the “how” and get you connected to our specialized teams.
From your board to your C-suite to your customers, our team can help you educate your company on ESG as a whole – and which parts of that whole best benefit your business.
Greenhouse gas emissions accounting
Whether you’re preparing for potential SEC requirements, an M&A deal, or looking to step up your reporting, our team can help you evaluate and measure your GHG emissions.
Stakeholder engagement & materiality analysis
Our team can also help you engage with stakeholders and perform a materiality analysis to identify the issues that matter most to your stakeholders, including investors, customers, employees, and others.
Complex supply chains can be a challenge – but a strong responsible sourcing program can protect your reputation and relationships.
At Crowe, our teams have been working in the ESG space for years, and we understand the intersections of regulations, standards, business trends, and best practices. We combine that understanding with our deep knowledge of corporate governance across industries to help you create a practical and scalable plan for your business.
We’re here to set you up to speak confidently about what you’re doing and why it matters and to help you make forward-thinking decisions.
Our team can help you create the right ESG strategy for your business. Reach out and let us know what questions we can answer.