ESG Policies and the Art of Negotiation

More and more of our corporate partners tell us they expect business owners to provide information about how their companies are including and embracing environmental, social and governance (ESG) principles in all aspects of their business from supply chain to strategic planning.

If you think ESG is only for big business, think again. Having ESG initiatives, policies and action plans can make a big difference in your next contract negotiations. In fact, it could be the thing that sets your company apart.

Below are 10 ideas for you to consider as you prepare for your next contract negotiation. Research is key. Knowing where you stand will go a long way in finding common ground.

Environmental — Corporations will look favorably on what your business is doing in its community. This could be as simple as promoting the fact that your company is involved in community cleanup programs and that you give your team paid time off for volunteering.

1.??? Do you have a sustainability statement?

2.??? Is your business involved in and/or supportive of any community sustainability programs?

Social — The social components of ESG policies include everything from accessibility concerns to diversity and inclusion policies and statements. One of our members recently shared that her company has implemented several programs for “whole person employee care.” The company has a partnership with a local organization that provides bilingual case management, counseling and chaplaincy services weekly on-site.?

1.??? Consider adding captioning to your videos and more intentionally tagging descriptions on your website.

2.??? Create a diversity and inclusion statement.

3.??? Look at your own supply chain — is it diverse??

Governance — The governance principles of ESG have to do with internal policies that measure compliance and risk management related to how you run your business. These include your employment policies, your grievance policies, your management policies and even your strategic plan.

1.??? Does your strategic plan address ESG policies?

2.??? Do you consider your employees team members, or do you treat them as workers and/or hired help?

3.??? How do you handle your accounting needs? Do you have an accountant? Is your company audited for financial compliance and internal controls?

4.??? Do you have a social media policy?

5.??? What is your communication policy? What about crisis communication?

A successful negotiator builds a relationship that is based on trust and expertise prior to the actual negotiation. By looking at your company’s commitment to ESG principles, you can show a potential contractor that you are a good partner who is interested in building business relationships that foster trust, integrity and shared values.