The most effective way for businesses improve their ESG performance and fight climate change is by implementing accountability – from grass roots to board level – in order to measure and mark their carbon footprint journey, according to Marc Lainé, Managing Director of ESI Monitor.
Standard advice and changes made in daily company culture aimed at improving sustainability, while important, do not work in isolation. Even setting up an ESG committee, introducing initiatives and adopting a framework can fail to make significant progress if there is no public commitment, no quantitative indicators, no integration into the company’s DNA and no involvement from the board.
“ESG and sustainability need to become truly embedded into a company’s DNA”
Environmental, social and governance factors and sustainability need to become truly embedded into a company’s DNA. Despite best intentions, sustainability is often the first thing pushed aside when people are too busy meeting deadlines for other priorities and therefore progress becomes slower than originally anticipated.
According to the Bain & Co, Cox Conserves Sustainability Survey, over 60% of businesses see costs as a major obstacle to sustainability programmes and less than 25% of employees say they are held accountable for sustainability through incentives. Furthermore, over 60% of businesses consider limited human resources as a problem so it’s no surprise that 98% of corporate sustainability programmes fail.
Without measurement and targets to meet, there are no consequences for inaction.
The most effective way to ensure sustainability is to embed at the core of a company’s culture the need to report, benchmark and set targets with involvement from the board. It is vital to use quantitative progress indicators to measure development and commit publicly to be held accountable
One way of achieving this is by completing a base-year carbon footprint report and follow it up annually. A base year is a reference point from the past that current emissions can be compared to.
This way, boards can make their own decisions based on the results and aim to improve their organisation’s carbon footprint report year-on-year. With targets and reporting, this ensures that the company is accountable to achieving these targets – or it risks reputational damage if they remain undelivered.
Essentially, you can’t manage what you can’t measure. So measure your base year emissions, provide your board with a benchmarked report and get them involved with making commitments for targets. With this implemented you will now have an empowered ESG committee and public engagement to propel your business forward and meet your targets.
Scientists predict that if we continue the way we are, then by the year 2100 global temperatures will increase by up to 3.9 degrees according to the Climate Action Tracker. Even if we can meet optimistic targets it is likely that we will still fail to meet the Paris Agreement goals of 1.5 degrees by 2050 – and warming above this temperature will have dire consequences for our planet.
At 1.5 degrees, 14% of the population will be exposed to regular severe heatwaves. At 2 degrees, this increases to 37%. At 2 degrees we will also see more deaths from vector-borne diseases and extreme heat, larger scale economic damages, mass migration and increased food scarcity
This impacts businesses as policies and sanctions to combat emitters can be costly and the reputational risk for companies that don’t transition to greener practice is significant.
Therefore it’s critical that we do all we can and businesses need to position their ESG and sustainability practice to the top of the priority pile, implementing practices effectively as well as communicating these measures.
It is down to businesses and companies to lead the way. According to the 5WPR 2020 Consumer Culture Report, 83% of millennials believe it’s important to use companies that share their values – and the majority of this demographic care about ESG approaches.
In 2020, the UK’s business sector was responsible for 59 million tonnes of carbon dioxide emissions. People look for companies that make an active, transparent effort to reduce their contribution to the statistics and destruction of our planet.
Change is possible and by implementing a strong strategy based on reporting and benchmarking, you will position your company to be leading the way in sustainability and elevate public opinion – which in turn leads to business success.
For any information about frameworks and reporting please get in touch with ESI Monitor.
Article originally published by Channel Eye