Since the term was coined in 2005, the ESG (Environmental, Social and Governance) framework has increasingly become the measure by which businesses consider their ethical impact. More than 90% of S&P 500 companies publish annual ESG reports, and with growing consumer and stakeholder expectations, it’s never been clearer that ESG is key to businesses in 2023.
The three-pronged focus of ESG is in step with public priorities, and ethical and transparent governance is also crucial to a company’s standing with consumers and investors. It’s also an important way that organisations are attracting new talent.
These social factors, as well as a greater cultural awareness on the impact of our actions, can help explain why ESG has grown from a box-ticking exercise to becoming an organisational cultural belief that can help unite employees in a common sense of purpose.
So, where does the responsibility of ESG lie in an organisation?
The short answer is: with everyone. More and more, businesses are recognising that a systemic shift in the culture of a company is key to behavioural change, and environmental and social governance is a responsibility best shared at all levels. Here’s a snapshot of how the full breadth of a business takes part.
MANAGEMENT TEAMS CONSIDER ESG IN TERMS OF:
• Representation of different demographics in the makeup of the C-suite and board of directors.
• An organisation’s financial transparency.
• How a business complies with ESG regulations.
• How executive compensation can occur in a transparent and ethical way.
MARKETING TEAMS PROMOTE ESG BY:
• Assessing how an organisation’s corporate goals align with ESG principles to draw out the through line, and tell a unified brand story.
• Accurately reporting business priorities and achievements without greenwashing. This could be by reporting on a company’s ESG progress or drawing attention to ESG-related news.
WAREHOUSE TEAMS CONTRIBUTE TO ESG BY:
• Minimising waste in their operations. This can involve incorporating recycled and recyclable packaging materials.
• Reducing plastic use and ensuring warehouse practices meet single-use plastic legislation and standards.
• Increasing material efficiency in things like pallet wrap and shipping packaging.
• Introducing EVs into warehouse fleet services.
• Ensuring proper training for safe use of spaces and PPE, and emergency preparedness.
HR TEAMS PROVIDE ESG BY:
• Implementing hiring policies that support the recruitment and retention of diverse staff.
• Considering ESG principles, like the cost of living and the gender pay gap, in staff pay procedures.
• Creating programs and benefits that support employees’ wellbeing and mental health.
PROCUREMENT TEAMS IMPLEMENT ESG BY:
• Sourcing sustainable products, and keeping up to date with sustainable certification and government sustainable development goals.
• Including ESG considerations in supplier scorecards and performance evaluations.
• Ensuring modern slavery legislation and standards are adhered to across the supply chain.
• Working with vendors and suppliers that follow ESG standards, then monitoring and holding them accountable to the agreed-on practices.
• Tracking and working to improve the carbon footprint of the entire supply chain e.g. by consolidating deliveries to reduce traffic and fuel.
OFFICE STAFF SUPPORT ESG BY:
• Having the correct recycling bins and signage across the office floor and in the kitchen.
• Disposing of or recycling printer toner cartridges correctly.
• Taking advantage of health and wellbeing initiatives, such as counselling services and volunteer leave days, offered by the business.
