1 THE EXECUTIVE’S PROGRAM SESSION 15 CORPORATE STEWARDSHIP AND ESG
• The
PURPOSE AND LEARNING OBJECTIVES
learn… • What
• About
Learninglegacy.Objectives:To we have learned/retained, thus far. why, what and how of ESG; specifically, about building gendersmart companies. leaving a legacy.
2
Purpose:To do a comprehensive review of what we have learned and learn why your company’s Environmental, Social, and Governance (ESG) is your
AGENDA 1. Orienteering, Recap of Sales and Summary 2. Why,What and How of ESG 3. Gender-Smart Companies 4. Summary and Assignment 3
2. Gathering company data:We need to know what is working. So, RENEW will be gathering company specific data to track your progress (confidential don’t worry).We’ll help you analyze your info, too.
1. This is just the beginning: Implementation begins soon! Get ready for us to be up in your space (if you want).We want you to succeed.You want growth. Let’s do it.
2.
REMINDERS
3. Exec Refresher Sessions:We will hold refresher sessions and “virtual HHs” with alumni.You need to network. During these you’ll learn and connect.
3.
4
4. After the Exec Session: Graduation Implementation 6 months of coaching and working the roadmap Data and surveys
1.
ASSIGNMENT 1. Use your calendar. 2. Define 3 “I Musts” for the week and map the time to do them onto your calendar. 3. Schedule 3 hours: – Write down the ideal sales experience for your target market / customer – Review your sales pipeline or distribution system 5Proprietary and Confidential to Renew LLC
6. Build a sales team Hire smart, competitive and persistent people.They should love targets.
6
2. Know who leads – Marketing or sales?
5. Use a pipeline – A tool to track leads through each step of the sales process. Use a pipeline, religiously.
1. Know your target market (intimately) – Write this down. Generally, you are too general. Get specific.
4. Map the sales system (Sales SOP) – Write down each step to deliver the sales experience and select KPIs to track whether you are improving “funnel” results.
SUMMARY SESSION 14
3. Write down the desired sales experience (future state) – Be your own customer to get real with your current state.Then write down what your customer experience should be from the start to when they come back for more and refer others.
7. Run your sales meetings – Like an enraged warrior! Reminder: Have you identified all the gendersmart risks and opportunities in all these?
THE HARD TRUTH: ONLY A FEW SURVIVE 7 Sources: Fortune, Inc.com, Forbes Top Reasons: Poor financial management, lack of planning, lack of management.disciplined 96% of companies fail within 10 years. Why?
THE NEED FOR DISCIPLINED MANAGEMENT 8 Note: Average management scores; 15,489 observations (2004-2014). Source: Bloom et al. (2017)
Build and use a 13-week Cash Flow. Update it every week.
Meetings Run great meetings! Use them to drive execution. Use meetings to drive execute. Have P, O and A for every meeting.
ORIENTEERING: STEP-BY-STEP
Marketing Mastery Focus and invest; Define and know your target market; know who serves who - marketing or sales; build marketing plans and drive a marketing battle rhythm. And measure it!
Financial Analysis Part 1 & 2 Calculate your monthly TvA and ratios and do a quick common size and trend analysis. Ask Why 7 times during your TvA meeting. Observe red flags in trends and common size.
Execution Build your binder! “I should write that down.” Write SOPs. They are the treasure. Plan + Organized Team + PAs + SOPs + Battle Rhythm = Results!
9
The Habits Have a morning routine! Use your calendar. Set 3 “I Musts” each week and map them to your calendar.
Intro to Finance Close your books by the 10th and hold your finance meeting on the 15th. DO NOT ABDICATE this work. You are the co-CFO.
The AMP Write down you AMP. Look to the Left! Strategic plan is the input. Use the AMP to set quarterly and monthly OKRs. Chop up your goals into bite size work that ultimately becomes weekly projects and I Musts.
Have a diverse group with authority (ideally a board) to give you feedback and holds you accountable to your plans. Ask for their feedback! Follow your own rules set the example. Everyone is watching you.
Reporting Start measuring 5-10 KPIs for your company. Weekly or monthly. As you measure it, you will see improvements.
Management Teams Have an org chart and use it to organize your company. Write PAs for those connected to you (your management team).
Governance
Session Topics If you did just one thing…
Strategic Planning Write down your 5-year plan. Start with your Guiding Statements, and KISS and use it (Coffee Stains) to set your annual plans.
Finance Part 3: Mastering Cash Flow
Mastering Sales Write down the ideal sales experience. Use a pipeline.
ESG:TERMINOLOGY AND FRAMING 10
TERMINOLOGY AND FRAMING
There are different terms that are often used interchangeably, and different frameworks which can be confusing. two key lenses:‘Do No Harm’ (risks) & Good’ (opportunity) used by a company to No Harm’ and manage its ESG-related risks. such as DFIs screen for ESG risks in their investments. ESG risks can be material risks. IFC Performance Standards are international standards for ESG management and used by companies and investors.
ESG Is
‘Do
The
Remember
11
Investors
‘Do
TERMINOLOGY AND FRAMING
12
The CDC Groups’ E&S Toolkit is a great resource for learning more.Although it is for CDC’s Fund Managers’ the content is directly relevant as it covers the ESG issues for a company by sector and ESG topic. Profiles
TopicsESG Sector
13
TERMINOLOGY AND FRAMING
Example
CorporateResponsibilitySocial Is used by a company to focus on the impacts of its own operations on its community and environment, and to the economy. It is part of a company’s business strategy. of PwC’s CSR approach
14
TERMINOLOGY AND FRAMING
TERMINOLOGY AND FRAMING
QUESTION:WHY,WHAT AND HOW?ESG 16
WHAT IS ESG? • ESG stands for Environmental, Social and Governance. • Evidence shows that companies who incorporate ESG into their planning and execution have a long-term performance advantage. • ESG factors are a subset of non-financial performance indicators (KPIs) which address sustainable, ethical and corporate governance issues. • Examples include managing the company's environmental impact, building a gender-balanced board and management team, and improving working conditions and benefits for employees. 17Sources: lexicon.ft.com/Term?term=ESGpaxworld.com/about/sustainable-investing/what-is-esg(modified)
WHY IS THIS TOPIC SO IMPORTANT THAT MOST IGNORE IT? 18
failures taxes and subsidies episode 21 part 1/
Sources: Source:lexicon.ft.com/Term?term=ESGpaxworld.com/about/sustainable-investing/what-is-esg(modified)http://www.crashcoursecriticism.com/2016/03/24/market
• You increase access to growing funding pool: Many investment funds are making ESG planning and reporting standard practices for their portfolio and use ESG screening to select deals.
Sources: lexicon.ft.com/Term?term=ESGpaxworld.com/about/sustainable-investing/what-is-esg(modified)
WHY IS ESG IMPORTANT? •
A great return on investment:What you give you get back 10-fold. Rule of thumb.
• You set yourself apart: Being a good steward of the environment, having good governance and taking care of people is a relatively new role for the private sector in Ethiopia.A great opportunity to be different.
19
• Gender opportunities (Do Good): Whilst ESG criteria are mainly used to do no harm, they also provide a way to improve and move from mitigating risks to capitalizing on opportunities
Gender risks (Do no Harm): Examples of gender risks (including those above) have been covered previously; as a recap its important to be aware of risks in your own operations and supply chain.
•
WHAT IS THE RELATIONSHIP BETWEEN ESG AND GENDER? • Gender risks are part of the ‘S’ in ESG: Gender risks such as Gender-BasedViolence (GBV), harassment and discrimination are covered under the Social pillar of ESG. Investors are incorporating gender risk criteria throughout their investment process including screening and due diligence.
20
NOTE:THE NEXUS OF CLIMATE, GENDER AND BIODIVERSITY 21 ▪ Climate risks are increasing, and they can be material risks ▪ Biodiversity and natural ecosystem risks are increasing, and they can be material risks ▪ The 2X Challenge Gender and Climate Taskforce is preparing guidance for investors on climate and gender (they also cover biodiversity) ▪ You can protect your company and get ahead of the game by considering the nexus of all three in relation to your operations and supply chain irrigationpoweredSolar Benefiting women farmers more (e.g. ,time savings from having to collect and apply watermanually)Keysectoragrobiodiversityfor(e.g.,-forestry)
DANGERS
22
5. Prepare SOPs: Prepare SOPs for ESG compliance procedures (procurement, waste management, hiring, compensation, etc.)
1. Write it down: Ask the owners to commit, in writing, that the company and management will act as good stewards of the community and the environment and commit to gender equality and employee rights.
3. Measure it: Select a set of ESG metrics.A few that you really care about and know you can track. Go here for metrics: https://iris.thegiin.org/metrics.
2. Produce a plan: Have an ESG plan. Start with a clear vision,AMP objectives and cascade.
Do not over complicate it
4. Make someone accountable:Assign a manager to be your ESG lead. Hold them accountable to targets.
Baseline your ESG metrics and set targets.
6. Report it: Report each quarter. Use them. 23Sources: lexicon.ft.com/Term?term=ESGpaxworld.com/about/sustainable-investing/what-is-esg(modified)
HOW TO MAKE YOUR COMPANY ESG SMART?
Sources: https://toolkit.cdcgroup.com/esg-topics/company-esms/
How to Make Your Company ESG Smart? See CDC ESG Toolkit: Section 6. Company ESG management systems
24
This is the checklist used by investors when assessing a company for ESG standards
Sources: https://toolkit.cdcgroup.com/esg-topics/company-esms/
25
How to Make Your Company ESG Smart?
WHAT,WHY AND HOW 26
GENDER EQUALITY
WHY? 27Sources: GEM Framework, MEDA and USAID “ Gender Equality Mainstreaming for Business Growth and Impact”
What is Gender Equality: It implies a society in which women and men enjoy the same opportunities, outcomes, rights and obligations in all spheres of life.
WHY? 28 •
•
•
Companies that had strong female leadership generated a Return on Equity (ROE) of 10.1% per year versus 7.4% for those without (on an equal-weighted basis). (MSCI, 2015)
Employing women in nontraditional jobs could increase firms’ productivity by 13-25% (IFC, 2013).
If women participated in the economy at the same level as men, $28 trillion would be added to annual global GDP by 2025 (McKinsey, 2015).
Sources: GEM Framework, MEDA and USAID “ Gender Equality Mainstreaming for Business Growth and Impact”
Less social unrest, less corruption and more stability is a clear benefit for companies.
➔ Community projects with a strong gender equality component can positively impact the business environment.
29 WHY?
Gender equality is associated with lower electoral violence and more state security.
GENDER COMMUNITYSMARTENGAGEMENT
•
The larger the gender gap, the higher the levels of both perceived and actual government corruption.
Women’s empowerment contributes to a reduction in conflict occurrence.
•
•
Countries that foster gender equality are less likely to go to war, are less likely to use force first when in conflict and they are less likely to get involved in violent crises.
•
•
•
GENDER COMMUNITYSMARTENGAGEMENT Community projects with a strong gender equality component can positively impact the business environment.
Case Study: Community Project with a Gender Lens In the area where METAD's farm is located cervical cancer was a major problem. The company worked with an international NGO to pay for cervical cancer tests for families.They also built community centres, profit shared with the local out-growers. When there was unrest, workers protected the farm - not damaged.
•
•
•
➔ Relationship of mutual trust with community, gender equality focus CASE STUDY: METAD
➔
30
3. Focus on women as a target market: In some markets women make more of the purchasing decisions. Conduct market research to develop products and marketing strategies that better meet women’s needs
5. Serve women: Developing facilities on office premises that are more appropriate to women, i.e. ,child feeding rooms, childcare facilities, or flexible working hours Framework, MEDA and USAID “ Gender Equality Business Growth
1. Become aware:Approximately half the world population, and addressable market is women…no brainer.
4. Develop women-focused HR systems: Develop recruitment procedures and mentorship programs to increase the mobility of women employees to move into management positions.
31Sources: GEM
and Impact”
HOW TO BECOME GENDER-SMART?
2. Balance the board and exec team: Reserve positions on the board and in management for women.Actively recruit women board and executive team members. Do not check a box.
Mainstreaming for
GENDER SMART SUPPLY CHAINS
32
– Business Fights Poverty (https://businessfightspoverty.org/activities/
33
Website with information on making your company ESG and gender smart: LINK – CDC’S E&S Toolkit and Gender-Smart Toolkit (https://toolkit.cdcgroup.com/ & https://www.cdcgroup.com/en/news-insight/insight/articles/introducing-the-cdc-gender-toolkit/)
RESOURCES
•
– IFC Performance Standards (https://www.ifc.org/wps/wcm/connect/Topics_Ext_Content/IFC_External_Corporate_Site/Sustainability-AtIFC/Policies-Standards/Performance-Standards)
BREAKOUT DISCUSSION 34
• What can we do today, to improve our ESG? – Internal – for our employees? – External – for our community? • What’s the next step to begin implementing this idea? 35
DISCUSSION
36
SUMMARY & NEXT STEPS
RENEW’s Theory With a little planning and disciplined execution, companies in East Africa can have a massive competitive advantage in their market.
37
38 ❑ Establish a set of good habitsespecially a morning routine ❑ Become very disciplined in 1) planning, 2) governance 3) execution, 4) finance, and 5) marketing and sales. ❑ Build a strong team around you –LEARN → DO → TEACH! ❑ Then start to build you legacy –have your company become a model of ESG ❑ Do these things and, unless your idea is totally wrong (doubtful), you will win. SUCCESS HAS PATTERNS…
Core Discipline UseYour Calendar and Set 3 I Musts Every Week. Make one of those I Musts to work ON your business One of the most important keys to success, is having the discipline to do what you know you should do, even when you don’t feel like doing it.
40
THE 5 HABITS 41 Mindset Your morning routine Practice Learn → do → teach Feedback Your board and coaching Focus Your plans and executing your plan Time Management Your calendar
42
•
• Close your books on the 10th: Enough said.
•
Pace yourself: Step-by-step you will implement the disciplines – Give yourself time. 12-24 months and you’ll have built your company.
Block 3 hours each week to work ON your business: Build your manager muscle. Write SOPs, review plans (TvA), review KPIs (TvA), read your financial statements (TvA). Run excellent meetings:These are you battle rhythms for execution. Run meetings for governance, management, finance, marketing and sales.
SUMMARY •
• Stay focused: Write down your plan (CS, FS, Plan). Have a group of people you respect hold you accountable to your plan.
Build good habits: Use your calendar. Set 3 I Musts every week. Hold a Legend meeting on Monday and the WIR meeting on Friday. Repeat.
•
Obsess about one thing: Put one thing above everyone else in your market. Do not get distracted or diluted.Align your company to this. Invest. Grow and maintain your ROE.
•
FINAL EXAM PREP • Next session is “The CEO” • Thursday will be a written test • The implementation begins 43
44Proprietary and Confidential to Renew LLC
FEEDBACK
45 Thank you! www.renewstrategies.com
WHAT ARE ESG ISSUES?
46Source: CFA Institute
