ESG reporting in 2021According to the Center for Sustainable Business at New York University, consumers are increasingly turning to the most sustainable and ethical products in all categories. Not surprisingly, 50% of the growth in consumer goods sales between 2013 and 2018 came from products with sustainable attributes such as fair trade procurement.
According to the Center for Sustainable Business at New York University, consumers are increasingly turning to the most sustainable and ethical products in all categories. Not surprisingly, 50% of the growth in consumer goods sales between 2013 and 2018 came from products with sustainable attributes such as fair trade procurement.
As recent employee protests at companies such as Wayfair and Amazon illustrate, employees, too, want their companies to make socially responsible business decisions.
Research shows that employees working in companies that have integrated sustainability principles into their strategy are more fulfilled at work, and stay longer in the company, reducing costs caused by absenteeism or lack of engagement.
Add to this the fact that environmental and social factors also influence the way businesses manage their supply chain and their relationships with communities and local governments. It becomes more important than ever to have reliable and measurable indicators that can meet the ESG (Environment, Social and Governance) requirements increasingly imposed by investors and stakeholders.
But before proposing a few lines of thought, it is important to define what is meant by ESG:
ESG (environmental, social and governance) criteria are broad categories encompassing a company’s activities that may have an impact on society or the environment. Of an ethical nature, ESG criteria are the 3 main dimensions used to measure the sustainability and ethical impact of an investment in a company or in an economic field.
What are the tools for implementing and monitoring ESG practices?
A well-constructed dashboard can be useful in overcoming the limitations of a traditional management system overly focused on financial performance. You will need a tool that provides you:
- the dashboard itself, which features a framework for adding non-financial performance measures to traditional financial measures,
- and a strategy map, which allows visual representation across multiple, related, strategic objectives of a business.
Such a tool can not only help improve the company’s performance, but also enable you to align your sustainability goals across organizational boundaries.
ESG performance indicators should be easy to grasp and measurable, whenever possible.
While some things are inherently easier to measure than others, this does not mean that they are more valuable.
CO2-equivalent emissions are an example. CO2 emissions (and their equivalent) are easy to measure and, in a single figure, express the impact created by greenhouse gases. Conversely, the impact on biodiversity and habitat, where cause-and-effect relationships are devilishly complex, is much more difficult to grasp and compare. Nonetheless, this type of impact can be extremely far-reaching.
Today, companies that want to meet the expectations of both shareholders and society must work with multiple and diverse stakeholders to implement “win-win” strategies that benefit all participants in the system.
Organizations must also be able to demonstrate their intentions and the sustainable culture of their organization. Clear and documented reporting – through a continuously updated dashboard – can be essential to demonstrate that your business is following the best ESG practices.
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