Steps to Implement ESG in Your Company
Understand the Relevance of ESG
ESG is a set of practices that encompass environmental (Environmental), social (Social), and governance (Governance) concerns, as exemplified below:
- Environmental: Use of resources and ecological impacts;
- Social: Fair labor practices, community support, ensuring diversity and inclusion;
- Governance: Ethical business practices, transparency, and corporate responsibility.
ESG has gained more attention in recent years due to the stance of BlackRock, a multinational American company, making it clear that ESG is a criterion in choosing which companies to invest in. BlackRock’s view of ESG as an investment criterion has led many other companies to understand this reality, as companies with ESG practices are less likely to be involved in scandals and have a long-term planning outlook.
Initial Diagnosis
Before starting to implement ESG in your company, understand where it stands in terms of ESG practices. This includes evaluating the environmental impact of operations, internal and external social practices, and governance structure. Below are some points you can assess:
- Environmental Assessment: Analysis of energy consumption, use of natural resources, waste management, and carbon emissions;
- Social Assessment: Examine working conditions, hiring practices, diversity policies, and community impact;
- Governance Assessment: Review corporate governance policies, management structures, compliance practices, and transparency.
Define the ESG Strategy
After completing the assessment, start developing an ESG strategy. The strategy should be clear and aligned with the company’s objectives, including specific goals, such as: how to reduce carbon emissions, how to improve working conditions, and how to strengthen governance practices.
Don’t forget to align the company’s vision and mission with ESG principles. The entire company should be on board with this new phase, including stakeholders.
Engaging and understanding the expectations and concerns of stakeholders is essential for the successful implementation of ESG in the company. Stakeholders include employees, suppliers, customers, the community, investors, etc.
Establish Goals and Indicators
Set clear and measurable goals for each aspect of ESG. Use performance indicators to monitor the progress of the implementation and make adjustments when necessary.
Examples of goals and indicators:
- Environmental: Reduce CO2 emissions by 20% by 2025.
- Social: Increase gender diversity in leadership positions to 40% by 2025.
- Governance: Implement annual compliance and transparency audits.
Execute, Review, and Report
Finally, put the action plans into practice to achieve the established goals and continuously monitor performance. It is important that the results are reported transparently to all stakeholders. You can use recognized frameworks like BR 20 30 to guide the preparation of sustainability reports.
Want to obtain the Sustainable Business seal for your company? Contact QMS to understand how it works.
