ESG: at the core of building back better

It would be neglectful to ignore the powerful circumstances in which we find ourselves.

Covid 19 taught us many things by holding up a mirror to our practices. It revealed blind spots in our ability to take care of genuine human need and blew open the gaps between our commitments and intentions, and how able we were to deliver these in a practical way.

We learned about agility and flexibility, lessons on how resilience has more to do with community strength than individual perseverance and compromise, and how the businesses best suited to cope with overnight change were the ones who were already tuned into ESG.

ESG 101

ESG (or environmental, social and governance concern) is a way of measuring conscience in action. With investors increasingly interested in placing their money where it will do good, the criteria go beyond the simple facts and figures of financial return. Rather than taking stock of a business’s value, ESG reflects its cost to the world.?

Sustainability as a buzzword means very little if it’s not backed up with implementable policy, demonstrable results, and an ability to radiate outside the four walls of the office into people’s lives, their communities and the health of the planet. It’s a yardstick of legacy.

Bloomberg estimates that ESG assets are set to reach over $53 trillion by 2025. This is something that needs to be taken seriously and as our work environments transform following the pandemic, it’s something that is only going to gain traction.

It’s time to get curious about how well you’re engaging with ESG, how well you understand it and how well equipped you are to put principles into practice. What stands between you and achieving growth through doing good?

Purpose starts with people

Giving employees something that is bigger than themselves and their role to believe in builds connection and belonging. If they’re engaged and satisfied, they’ll be more committed, will stay with you longer, work harder and will produce better results. A survey found that those who felt their position had ‘special meaning’ rather than ‘just a job’ were ‘56% more likely to experience innovation opportunities’.?

If you want the kind of creative leaps that will lift you above the competition and drive growth, this is the place to start. A clear Employee Value Proposition (EVP) involves thinking about what attracts people to your team, why they choose to stay and also engaging with why they choose to leave: as a point of reflection, how do these three factors intersect with your approach to ESG?

How you do business is in the spotlight

We’ve discussed some of the internal benefits of taking care of those who work for you but it’s impossible to ignore the external in terms of reputation, investment opportunities and being a beacon for others. In this way, you push progress by allowing the ripple effect to spread beyond your organisation.

Challenge terms like net-zero and what they mean to you. Think about your choices in terms of consumables and waste disposal. If you’re committed to making an impact, it won’t be enough to turn a blind eye to your supply chain, you’ll be actively involved in improving it. A dynamic, evolving approach will guard against greenwashing and keep you up to date with issues like who owns perceived ethical companies.

‘Token programs and philanthropic side projects erode the public’s trust and invite backlash against the reform movement itself’ states the Harvard Business Review. To guard against initiatives doing more harm than good they need to be quantifiable and underpinned by honest intentions.

?Do the numbers add up?

Transparency is key: both in the way we display data about our approach to ESG and how meaningful it is.

?A published policy on diversity should be backed up with figures that tell the story of the true makeup of the workforce. Is there any disparity in terms of training, wage gaps or opportunities for promotion? What initiatives are in place to find blindspots, listen to a variety of voices and make things better?

The numbers speak for themselves and show the impact of your initiatives. What proportion of your workforce receives a living wage; what is your training budget and where is it allocated? What are your figures for carbon emissions? This information needs to be available to all stakeholders, including the people who work for you.

Purpose in action

Governance formalises your commitment. It takes a sentiment like ‘how can we do this better?’ and creates a solid framework for change. Actively developing this kind of alignment means that procedures, conversations and operational structures become more about being rather than doing.

Purpose underpins everything, which is why it may need a radical rethink. Consider these two basic questions:

• What is our purpose?
• What do we do?

If there is a striking disjoint between the two answers, then your governance needs attention. Dare to conceptualise the benefits of doing things differently and then fearlessly explore ways of getting there.

In practice, what does this look like?

‘Our purpose statement is to do the things you love with the people you care about and great things will happen.’ says Bruce McFarlane, CEO of fast-growing Melbourne professional services firm BlueRock.?

Nothing says commitment louder than bravely stepping outside of the way that things have always been done in the pursuit of what’s good for the planet and its inhabitants. The not-so-surprising business growth that runs alongside highlights why ESG is no longer an optional consideration, it’s essential.

Putting sound ESG principles at the core of your business may take a different shape to others and that’s OK. What matters is that we all grasp this once-in-a-lifetime opportunity to achieve sustainable growth through purpose.

ESG looks different to every business and for it to be authentic, honest and actionable, it should. Talk to an expert about what it means for you and what the next steps are.