This article lists 7 steps to develop and implement a strong ESG strategy.

To that, we add 3.

 

1 – Don’t start with an ESG program!

This is one of ours.  This might seem odd, but we are recommending you NOT start with an ESG program.  Don’t jump into the deep end of the pool.  Instead, start with becoming environmentally certified sustainable.  This has the highest ROI.  Then, once comfortable that your sustainability program is working to your satisfaction, become certified carbon neutral.  It is a natural second step after your sustainability certification.  Then…proceed with the S and G of your ESG program (you already have the E).  Finally, turn your attention to becoming certified Net Zero.

2 – Hire a Pro

This is also one of ours.  Bring in a group that helps you achieve the points listed in this PPP.  If you follow this PPP, it will be far less expensive and have a much higher ROI for you, than if you try to build a custom program that is not aligned with global standards.

3 – Carry out a materiality assessment

A formal materiality assessment is used to benchmark how different ESG issues rank in terms of importance for your business and your stakeholders. Starting with a materiality assessment can help to prioritize different issues and initiatives as you develop your ESG strategy and can also suggest where you need to be setting targets or developing your reporting. 

4 – Assess your current baseline

Once your ESG themes are prioritized, the next step is to record a baseline of your existing policies, metrics, and engagements. It’s a good idea to engage cross-functional stakeholders within the organization that have expertise in each priority ESG topic for this activity. Information can then be collected from annual reports, policies, and other available data, which can then be supplemented by interviews with internal stakeholders to build a full picture of the current baseline.

5 – Set Objectives and Goals

When implementing any new strategy, it’s important to set objectives and goals so you can track your progress and ensure that the actions you have taken are making a positive change. Your baseline should help to give you a better understanding of what is a realistic goal for your business, and your key stakeholders should agree that these goals are achievable and feel motivated to reach them.

Your objectives should, at a minimum, cover the following: Measuring the impact of your actions, tracking your organization’s overall ESG performance and benchmarking yourself against industry peers.

6- Conduct a Gap Analysis

A gap analysis is the next step in helping you to determine how to achieve the ESG goals you have set out. It makes a comparison between your current baseline and the target ESG model you have for your organizations and highlights the disparities and opportunities for improvement.

A better understanding of the scale and area of these gaps can help you to do the right preparation to ensure your new ESG strategy is successful, and to highlight areas where you may have problems down the line.

7 – Design your framework and build the roadmap

You should now be in a position to design your ESG framework and build a roadmap – mapping out your organization’s vision and goals, and showing the tangible steps you will take to achieve it. This a great tool to ensure accountability for key milestones, help to track your progress and allow you to share your ESG strategy both internally and externally with customers and key stakeholders.

8 – Set an action plan and measure KPI’s

Now that your general roadmap has been determined, it’s time to set out a detailed action plan and begin tracking KPI’s that feed into the objectives and goals you set earlier.

Your action plan should focus on the steps needed to integrate an ESG focus into existing processes and practices. It should ensure the ESG remains a core focus of your organization and doesn’t slip off the agenda, meaning that going forward you will be able to have positive and productive conversations about ESG at any point.

The KPI’s you put in place at this stage should track progress at an individual or team level – measuring the small but significant actions and improvements that are being seen day to day.

9 – Report progress

To develop your ESG report, it’s important to decide what you want the report to accomplish. It can be a combination of communicating ESG strategy to stakeholders, sharing company specific ESG goals, and evaluating progress and engagements in key ESG areas.

It’s important to decide this early in your ESG strategy so that you can ensure the right data is being captured, and it will simplify the process when it comes time to run the report.

The ESG strategy should be reviewed and updated every year to ensure the organization stays aligned with current industry standards, stakeholders’ and customers’ expectations and overall business strategy.

10 – Promote your achievements!

Again, this is ours.  The market wants your company to be certified sustainable; it wants you to be carbon neutral; it wants you to have an ESG program in place; and it wants you to be Net Zero.  If you have done the works to achieve these, be proud of it – promote your accomplishments.  The market will reward you.