What Is An ESG Strategy?
Mainstream media makes it seem that a public and well-formulated ESG strategy is a trending buzzword when truthfully, ESG strategy has been pivotal to private sectors joining the planet-positive movement for decades. Locating the sweet spot of being well-versed with eco-trends versus identifying critical pillars of your corporate regenerative mindset is a question many Handprint clients ask.
So, what came first: climate activism or an active ESG strategy?
ESG Strategy Representation In Media
The scientific community has been ringing the alarm on climate crisis concerns since the 70s. With the first U.S.-based Earth Day happening on April 22, 1970, and the creation of the U.S. National Oceanic and Atmospheric Administration in the same year, it was puzzling to lack emotional societal investment. However, when the 80s famines of Africa took over media reports, it coincided with the recent appeals for the public to focus on the oil energy crisis and scientists testifying before American Congress that the world was approaching a ‘new climate frontier.’ The 1992 UN Conference in Rio de Janeiro was unsuccessful in producing a framework for climate change, but it was a catalyst for what was to come.
In 2000, the United Nations publicized its first attempt at Sustainable Development Goals, and coincidentally in 2001, ESG strategy began floating across global boardroom tables. However, it would be another fifteen years until the UN SDGs’ unanimous consent among all 193 members brought forth clear and inclusive goals that were approachable for not just political parties, but also local citizens.
Understanding ESG Strategy Meaning
To harness the momentum of an ESG strategy, let’s break down what each letter means and how it can be reflected in your corporation.
“ESG” stands for environmental, social, and governance. Environmental obligations include understanding your company’s business consumption, putting clean energy sources in place, identifying ways in which the company’s waste is broken down, and if your product contributes to resource depletion. Social obligations include employee wellness, health and safety, and equality. Governance obligations can include but are not limited to stakeholder diversity and structure, community initiatives, risk management, and accountability.
It has never been more urgent that sustainability, regeneration, and planet-positive actions are in everyone’s best interest, and the United Nations recognized that these pillars would help protect organizations while aligning with sustainability initiatives.
An ESG strategy framework requires an organized plan to reach all three of these terms. A well-thought-out ESG strategy will also include accountability and help to develop the company ethos from beyond the confines of the boardroom.
What Are The Benefits of An ESG Strategy?
If this is the first time you are developing an ESG strategy, the rubric for employees and consumers alike will need to be transparent on how progress is tracked and displayed.
There is no downside to developing an ESG strategy, especially from a consumer point of view. In a 2020 survey initiated by Accenture, 60% of consumers have made more environmentally friendly, sustainable, or ethical purchases since 2020. With more time to research brands and awareness of a planet-positive mentality, long and short-term benefits are abundant. These include:
- Helping the company to achieve sustainable and ethical growth, reduce quarterly risks, and enhance long-term value creation.
- Retaining consumers that align with your values. It is becoming increasingly important to the public how brands interact with the environment and sustainability.
- Activating cost-saving green initiatives. With an ESG strategy in place, you can begin sourcing the best energy-saving measures for your company, including reducing waste, renewable resources, and lowering your carbon footprint.
- Engaging employees through a social platform that highlights opportunities to interact with environmental initiatives. (Find out more about how Handprint can align your team with easy regeneration in every KPI!)
An ESG strategy can also help avoid fines, lawsuits, boycotts, and scandals by understanding local and international environmental regulations.
How To Develop An ESG Strategy?
You might not realize that you already have the origins of an ESG strategy in pre-existing workplace safety guides, a corporate culture focusing on wellbeing, or a preliminary DEI committee. Starting from these points will naturally flow into a holistic ESG strategy expansion where you can assess what can be expanded versus starting from scratch.
Examples of ESG frameworks you can implement include,
- Developing a task force to address employee wellness
- Assigning a public advocate as an unbiased representative on an environmental committee
- Investing in technological tools or partnerships
In 2023, reporting systems already exist for corporate ESG strategy to thrive. Examples like the Global Reporting Initiative (GRI), or the Sustainability Accounting Standards Board (SASB) are a great place to start.
Boost your ESG Strategy With Handprint
Handprint clients have enthusiastically used different solutions to embed regenerative sustainability at the center of their business operations.
Climate change is one of the biggest problems facing humanity today, and traditional sustainability efforts have not been enough. Specially for companies falling under the service economy, where their actual footprint is small. These companies need to go beyond offsetting their footprint and creating planet positive actions to that have a real positive contribution to Nature.
Handprint makes it simple to clients to access a diverse range of projects around the world, projects that are restoring ecosystem that are critical for planetary health.
For example, Thunes, a FinTech corporation, recognized that sustainability and a regenerative economy were pillars of their ESG strategy. With Handprint, they selected an impact partner, Yakopi, and provided transparent results to stakeholders and employees. It is a small motivational step that makes regeneration a natural part of everyday life.
Learn more about Handprint clients and their success stories on ESG frameworks and strategy, or download our Race to Regeneration Guide to help pave the way for a future thriving on planet-positive actions.