One in five heads of sustainability (22%) say their business is pioneering ahead with environmental, social and governance (ESG) practice. They pin their success down to sound metrics, new product development which places ESG at its nucleus, and an almost reverential approach to the UN Sustainable Development Goals (SDG) Action Plan.
Where does your business sit on the following scale of ESG practice?
How far along is your company on its Net Zero journey right now?
Does your business actively work with its suppliers on combined climate commitments?
Drawn from the Pulse Business’s second Sustainability Tracker Pulse, the findings give cause for optimism, not least because 54% of respondents says their company is ‘mid transformation’ in terms of ESG practice.
- Whilst a bevy of self-declared ESG pioneers are overwhelmingly positive, for most, this is an ongoing transition. They are ready, willing and able to develop/follow an action plan and committed to becoming Net Zero - yet there are a myriad of complexities and uncertainties to overcome. As one head of sustainability working in the financial sector explains: “It’s a journey. Very few can claim to be pioneers…”
- The UN SDG action plan is currently the preferred model to follow, cited for its clarity and range - making it easy to engage with staff and partners. One head of sustainability working in the consumer services sector asserts: "This provides a wide framework which is applicable internationally. It is easily communicated and can be engaging for employees also”.
- The impact of sustainability on the bottom line is strong - particularly in terms of developing new products/services with sustainable practice at their core, but also as a lever for maintaining existing and forging new business relationships. One sustainability leader in the construction industry says: “ESG is key to tendering and winning new work, as well as delivering on current con-tracts with existing clients. It is no longer an add-on, it is key to being a successful business in our industry.”
- Data is a major challenge - managing the volume and making sense of it in practice is an ongoing headache for some and can become a hindrance for promoting success. An environmental leader from the building sector explains: “ESG is starting to have a credibility issue, data can be used to show many things and sometimes obscure the real story behind an approach, ie, little meaningful change.”
Where should companies start?
The Pulse Business’ Sustainability Tracker suggests ESG best practice is showcased by the companies who are pioneering with ambitious Net Zero plans, backed up with science-based targets. ESG is also an integral aspect of their new product lines or services.
For those playing catch-up, there is a large amount of strategy setting with regard to ESG and Net Zero. Despite the need for more ESG data, many companies are still confused by where to start and what to measure.
Perhaps then, it is no wonder then that the majority of companies are attracted to the Sustainable Development Action Plan, to frame their ESG responses, given its relative simplicity and accessibility. Yet the most surprising aspect of the comments shared by sustainability and ESG leaders is a lack of reference to the potential cultural impact of ESG, given that commitment surely requires employee buy-in and understanding.
Which one of these, if any, is the most effective way to prove how ESG impacts the bottom line?
Which one of these, if any, is the most effective starting point for building your ESG framework and broader plan?
Which one of these, if any, is the greatest challenge facing ESG right now?
Only one sustainability leader working in the leisure sector considers this in any detail: “Creating a culture that builds understanding, and empowers staff and wider stakeholders to make of good decisions within their scope of influence and authority. Every employee needs to live the change they expect.”
The Pulse Business’s second Sustainability Trends Tracker sought the opinions of 450 heads of sustainability based in the UK representing a range of industry sectors. The Pulse ran from mid to late September 2021.
Written by Imogen Osborne, founder of the Pulse Business
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