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Advice on Implementing an ESG Program

July 17, 2023
Businesses with higher ESG maturity not only are more profitable but have less volatility in economic performance.

With the continuing demand to include ESG as part of a company's DNA, an article on JD Supra by Steven Andersen offers advice on how to set up an ESG program. 

Identify Risks and Opportunities

“Risk” and “opportunity” are inherently subjective terms, and like ESG itself, mean different things to different organizations. Here, we’ll rely on the definitions of “risks” and “opportunities” given in ISO 45001, the global standard for occupational health and safety (OHS) management systems.

“Risks” basically represent a potential for something bad to happen, combined with the severity of the outcome if it happens. “Opportunities” are ways we can further improve our performance. We need to maintain a broad scope when identifying operational risks to consider not only safety and environmental risks but also financial, societal, and reputational risks as well. Simultaneously, we should also be proactive in pursuit of opportunities for improvement.

While risks and opportunities can often seem subjective, we need to establish objective methods and systems to document, quantify, and prioritize those risks and opportunities so we can determine where to focus ESG program resources, as well as communicate risks and opportunities to stakeholders and demonstrate the specific actions you’re taking to address them.

Build the Business Case

This is something you may need to do to persuade stakeholders to follow an ESG approach in general, as well as to build support for individual ESG-related projects, such as an energy reduction project. There is a growing volume of data showing that ESG approaches pay off — quite literally. For example, a Harvard Law School study found that businesses with higher ESG maturity not only are more profitable but have less volatility in economic performance.

Recognizing this reality, ESG performance is an increasingly vital consideration for the investor community, with investment trends shifting dramatically toward businesses with robust ESG programs with participation in ESG reporting frameworks. By November 2021, investment in ESG-focused funds grew to a record $649 billion worldwide, up from $542 billion in 2020 and $285 billion in 2019. ESG-focused investment funds now account for 10% of worldwide fund assets.

In addition to attracting investment, one of the hallmarks of today’s workforce (especially among the rising proportion of Millennial and Gen Z workers) is an increasing desire to work for organizations that are responsible corporate citizens. A well-established ESG program can be an invaluable asset for attracting and maintaining the highest talent and nurturing the value of your human capital.

To read the full article click here.

About the Author

EHS Today Staff

EHS Today's editorial staff includes:

Dave Blanchard, Editor-in-Chief: During his career Dave has led the editorial management of many of Endeavor Business Media's best-known brands, including IndustryWeekEHS Today, Material Handling & LogisticsLogistics Today, Supply Chain Technology News, and Business Finance. In addition, he serves as senior content director of the annual Safety Leadership Conference. With over 30 years of B2B media experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2021), which has been translated into several languages and is currently in its third edition. He is a frequent speaker and moderator at major trade shows and conferences, and has won numerous awards for writing and editing. He is a voting member of the jury of the Logistics Hall of Fame, and is a graduate of Northern Illinois University.

Adrienne Selko, Senior Editor: In addition to her roles with EHS Today and the Safety Leadership Conference, Adrienne is also a senior editor at IndustryWeek and has written about many topics, with her current focus on workforce development strategies. She is also a senior editor at Material Handling & Logistics. Previously she was in corporate communications at a medical manufacturing company as well as a large regional bank. She is the author of Do I Have to Wear Garlic Around My Neck?, which made the Cleveland Plain Dealer's best sellers list.

Nicole Stempak, Managing Editor:  Nicole Stempak is managing editor of EHS Today and conference content manager of the Safety Leadership Conference.

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