Whether you are a small or large business, telling your environmental, social and governance (ESG) story is fundamental to your brand identity and reputation. It is a way to stand out in the crowd and effectively communicate your sustainability efforts, both internally and externally. Having a clear, well-articulated ESG narrative will help build trust and credibility among your people, and help to improve your reputation externally, giving your business a competitive edge.
Human Resource (HR) and Learning and Development (L&D) teams play a critical role in leading business wide ESG commitments in an organisation. Having your people up-to-speed and enthusiastic will help ensure these challenges are met in an innovative and consistent manner across your company.
It is vital that HR and L&D teams understand the ESG journey so that your people strategies and initiatives support the business. In turn, this will allow your people to be an inspired and inspiring part of your ESG narrative and journey.
The aim of this article is to support HR and L&D professionals stay current in this meaningful, emerging business direction.
Understand your investors, consumers and staff
Globally, the expectation for companies to meet ESG standards is increasing, and investors are demanding that businesses perform well across all three areas. In fact:
- 91% of investors state that non-financial measures have played a part in their investment decisions
- 75% of investors find value in robust climate risk planning
However, it’s not just investors that are asking for ESG compliance. Staff and consumers are ranking ESG high in their decision-making too:
- 71% of job seekers prefer to work for an environmentally sustainable company
- 54% of consumers are willing to pay a premium for sustainable goods
This is why it’s important, now more than ever, to clearly define your ESG goals and communicate your commitment. Here is our step-by-step approach to help you make ESG part of your company’s narrative:
Step 1: Define your ESG goals
ESG goals define your organisation’s vision, strategy, and keep your company accountable. It may be reducing carbon emissions, promoting inclusion, or enhancing board governance. Identifying the ESG areas that are most relevant to your business, industry and stakeholders is a key first step to crafting your ESG narrative.
Step 2: Understand ESG measurement and reporting
Measuring ESG metrics can include both quantitative and qualitative information to help stakeholders understand your company’s actions and intentions. This data gives supporting evidence to back your brand’s ambitions while also helping you set intermediate goals to keep the momentum high.
There are several globally accepted frameworks, each with their own specific lens on ESG, depending on your focus and priorities. Some examples include:
- Global Reporting Initiative (GRI)
- Sustainability Accounting Standards Board (SASB)
- Task Force on Climate-related Financial Disclosures (TCFD)
- The United Nations Sustainable Development Goals
- United Nations Principles for Responsible Investment (UNPRI)
Most companies use one or two frameworks, based on their unique business circumstances, ESG focus areas, industry, what their competitors are using, their audience and emerging regulations.
Step 3: Conduct baseline assessments and set ESG targets
Before setting any targets, many companies will conduct baseline assessments to compare current performance against key ESG criteria. The results can help you track the progress being made toward your sustainability goals. Many large ASX businesses will already have these baseline measures underway.
Tracking baseline measures and progress toward your ESG goals might include carbon footprint measures, energy bills, the volume of water consumed, and business landfill waste by weight, for example.
Step 4: Define key KPIs for each target
Generally, each ESG target will then incorporate more specific metrics and key performance indicators (KPIs). Where possible, organisations often refer to international standards to strengthen the validity of their targets. For example, setting GHG emission reduction targets in line with Science Based Targets initiative (SBTi) will ensure your reduction targets are aligned with the Paris Agreement.
To be effective, your data tracking systems should span all three areas of ESG. In other words, your ESG initiatives would be best served by tracking environmental key performance indicators (KPIs), social KPIs, and governance KPIs. They should also be specific to your organisation, your industry, geographic location, goals, and values.
Setting specific ESG KPIs will help your company:
- Define its sustainability strategy
- Demonstrate a firm commitment to ESG, which can be leveraged in reporting and other ESG communications
- Track progress toward both short and long-term ESG goals
Focusing on implementing organisation wide ESG training may be an important KPI for HR and L&D teams.
Step 5: Get C-Suite involvement
Support and buy-in from every level of your business is key. From to the C-suite to the interns, it is important that everyone is on the same page. Take the opportunity to consider your company’s core values and ensure that they are reflected in your ESG mission statement.
Step 6: Communicate your ESG narrative
Most listed businesses produce an annual sustainability report, in conjunction with their traditional annual reports. The level of transparency differs across organisations and industries. Some organisations choose to widely share data and progress towards their ESG goals. Others share success stories internally but have more limited public messaging.
Developing a compelling ESG narrative can be useful in both contexts — to share internally and bring your people along the journey or sharing externally with your corporate communications in a more conventional manner. In either case, an engaging and useful ESG narrative is likely to include sharing the data and developments you’ve made. This may include reducing your carbon impact, upskilling your workers, addressing supply chain challenges or by improving your corporate governance.
ESG and your company’s reputation
To establish your company as a leader in ESG, it’s important to make known your commitment to your ESG goals among your people and your stakeholders. Kineo’s ESG Training Suite is designed by industry experts to help your company:
- Achieve your ambitious ESG goals: Gain the knowledge and skills to lead sustainable practices and understand your reporting requirements.
- Harness the power of your people: Empower your staff with meaningful, engaging and highly effective training that uses a mix of multimedia, real life scenarios and interactive quizzes for best results.
- Transform your business: Increase your bottom line, acquire, and retain top talent, and strengthen your competitive point of difference. Set up your business for long-term success.
To learn more about Kineo’s ESG training courses, speak to a Kineo expert.
Subscribe to Kineo’s ESG Early Adopter Program before March 1st 2024 to enjoy the early access benefit including up to 50% off Kineo’s ESG Suite.