ESG: Irritating Officemate or Trusted Business Partner?
ESG is not right around the corner, and we are not preparing for its arrival.
ESG is here to stay, and many questions remain. Do I — and my company — really understand our roles in ESG? Are we integrating ESG into our operations or is it fodder for the next annual or sustainability report? What do we really consider material data for our company? What are the metrics and goals we are using? Are we committed to ESG as part of our leadership message and is the rest of the organization embracing it?
The frustration with ESG is real, well founded, and you are not alone. ESG can sound like the colleague who sets a meeting agenda with 25 items to be covered in 30 minutes. Or the one who sends texts during a meeting and only looks up at the end to say they disagree with the decisions made and that another meeting is needed. Or worse yet, the person who always has “one more thing” as everyone at the table thought you had accomplished what you set out to do. You know these people.
Council membership now exceeds 600 organizations, each with its own ESG knowledge level and plan. Some have recently begun their ESG “journey” while others have integrated ESG into their operations and are executing on ESG stretch goals. There is no silver bullet for ESG success, and the Council has broken down its ESG activities into five strategic categories, where member companies can find and access the resources they need.
First, the Council is an ESG policy resource and advocate on behalf of its members and an education resource for our sector. Every day, we all receive an avalanche of ESG information from government, non-governmental organizations (NGOs), investor entities, ratings organizations, thought leaders and everyone in between. The Council takes these mountains of information and crafts them into actionable recommendations on whether the Council should engage on behalf of members.
At the most basic level, we are committed to educating because we cannot assume policy makers, the media and other third parties have any idea how things work or do not work in the business world. A great example is the recent U.S. Security and Exchange Commission request for information on climate disclosure, where we submitted a comment letter that educates policymakers on potential impacts of expanded climate disclosure to our members. We recognize and value that we work in a heavily regulated industry, but we also need predictability, material applicability, credit for the work that is being done and lead time for implementation.
Internally, we are building an ESG Center of Excellence that includes a library of key topics that can serve as a convenient resource for our members. Sometimes, all we need is an example of what others have done or have access to a reference document that addresses a need.
Second is the Council’s shining jewel, its training and education programs. The Council offers a best-in-class ESG Certification Program that elevates individual ESG knowledge with a broad curriculum and cadre of experts that allow for participants to pursue specific answers to the questions facing their individual companies. Beyond set programs, the Council is constantly working with members to identify topics and speakers, commission research and coordinate issue-specific forums to ensure our members have a venue to learn and share.
Next, the Council is committed to sharing best practices, so each company does not need to reinvent the wheel. We know it can feel like you’re out there on your own, but you are not! Whether through a curriculum-based engagement like the ESG Certification Program, a specific information sharing event, or one-on-one assistance from Council staff, the Council is a key resource and partner in your ESG efforts. If we don’t know the answer, we probably know someone who does, and we are happy to make that introduction.
Fourth is capital. ESG and capital are completely intertwined. Having an ESG story that addresses the expectations of investors will keep the capital flowing. As reporting and materiality criteria continue to evolve, it is critical to keep your audience in mind. A company can have what it perceives as a strong ESG program with all the right buzzwords and tactics but can fail if the effort isn’t clearly responsive to the criteria required by investors, lenders, raters and others.
Finally, the Council wants to highlight and amplify your successes. Your progress leads to ESG improvement across the sector. The Council wants to work your good news into our talking points and advocacy efforts.
We’ve identified strategic areas to prioritize efforts and allocate staff resources, but the Council is constantly adapting and evolving as part of the broader ESG ecosystem. Regardless of where you are on the journey, the Council wants to help you work with the toe-tapping, gum-chewing, outspoken colleague named ESG.