While there was a lot of damage done through the COVID-19 pandemic, there were several good things that came from it. Companies were forced to have their businesses go remote to prevent the spread of a deadly virus. But beyond that, two-thirds of global executives believe the pandemic was a catalyst for action toward ESG initiatives.

The only problem is that many don’t know where to start.

Over the past few years, we’ve seen how a lot of businesses have put together initiatives. Some of them are ambitious and can drive change and are good examples of what to pursue on a large scale. L’Oréal SA, Colgate-Palmolive, Adobe, Avient Corp, Bank of Montreal, and HP.

But each business is unique and holds slightly different values within each industry, so businesses can’t exactly copy whatever the top-ranking companies in their industry are doing. Each business owner is faced with different problems. And combined with political and public blowback and scrutiny, it has become crucial that ESG is done right.

And in terms of what it takes to get ESG done right, it’s a matter of getting started.

Saying & Doing Are Two Different Things

Fortune hosted an Impact Initiative summit in Atlanta in late November 2022 in which panellists discussed the various challenges companies are faced with when implementing ESG policies. One of the points that came out of that summit that the panellists all agreed on was knowing exactly where to start was not as important as starting.

The reason that point was agreed to was that IBM conducted a survey of C-level executives in May. From that survey, they found that 85% of the business leaders that were surveyed said they had sustainability written down. However, only 35% had started to implement that strategy.

It’s still a sizable amount and the numbers are looking good, but there is a massive credibility gap. A lot of business leaders are saying they have something prepared, but they haven’t bothered to implement the plan.

Looking into the reasons, a lot of it falls under the broad ESG umbrella. Things like:

• Quantifying carbon emissions, loss of biodiversity, income inequality, and boardroom diversity.
• What area to prioritise first, second, third, and so on?
• Determining how effective ESG initiatives will be.

Even regulatory agencies will have a tricky time, as accountability and transparency are major issues. How can the SEC consider reporting rules for businesses? How should companies disclose their climate change risks in association with their operations?

Accountability is also a data problem since emissions outside of the company - such as within a company’s supply chain - are notoriously difficult to measure. It will be even harder for companies to mitigate those emissions in some cases as manufacturers could lie about cutting down trees while still doing so. Or some manufacturers could run sweatshops under the watchful eyes of their employers.

In the end, people need to feel reassured that when a company says they’re doing something, they are, and that people can track that over time. To do that, you need to start.

There Is Further Clarity In What Needs To Be Done

The silver lining in all this is that steadily things are coming together. COP27, while not as impactful as people might have wanted, still had significant movements. The most notable is standardising global metrics for corporate climate governance.

Another way to look at it is that COP27 is setting up the framework that companies must be prepared to integrate very shortly. And already we’re seeing some semblance of that with many businesses setting big targets before 2030, or at that point. We see governments finalising regulatory frameworks for companies to provide transition plans. Many are setting some form of science-based net-zero targets.

There is a lot of commitment and through that more clarity will be coming forth. As governments demand transition plans, they’ll eventually be standardising the process. And even though smaller businesses won’t have to uphold those standards in the same manner, it does establish a further framework to refer to, rather than looking at another company’s ESG report and doing the same thing on a smaller scale.

Social And Governance Issues Are Being Discussed

This same treatment is beginning to happen in the other aspects of ESG. Currently, a lot of the focus is on climate change, and rightly so. Equally, when it comes to providing solutions and implementing initiatives, a lot of the literature will focus on the environmental side of things. But due in part to the pandemic and the rampant inequality seen, for example, in the US, social and governance issues are starting to take root and discussions are being made. However, these aspects are much harder to discuss, because we can’t externalise them. They’re about us, about people, and we don’t have the capability (or problem) of separating in the way we do with the natural world. 

It’s easier to measure carbon emissions than it is to address many human rights issues the company solves, how much living wages are, or the future of workforce skilling. In the most important way, inequality is more problematic than the current climate crisis. When there is a lack of teamwork amongst people, it leads to unpredictable - and often negative - outcomes for everyone involved. Imagine the chaos that would ensue if most of the Amazon workforce didn’t show up to work because their salaries aren’t good enough or they’re tired of being mistreated all the time. Imagine the global economy grinding to a halt, without a pandemic. Would we be in any position to become custodians of the environment?

You can think of social issues to be solved short-term, but with long-term effects. You’re not going to be able to hit your environmental goals in a few years unless you have the entire group on the same page, motivated, and happy to work with you right now. Good work starts with happy people.

Planning Is Nice, But Start Now

With all this in mind, it’s easy to put together a plan and iron out all the details. It’s understandable why businesses want to do that due to the possible backlash of a botched ESG initiative or plan. But it’s important to note that if a business attempts to map out the entire path to net-zero emissions, no corruption, and becoming the most socially responsible company to work for, well, before setting off to do that, that business will be left behind.

Like with any plan, it’s better to have some semblance of one rather than know exactly how everything is supposed to go. Issues change and new developments and discoveries are made every day. All of this comes back to a quote about tree planting which is apt when it comes to taking action:

“The best time to plant a tree was 10 years ago. The second best time to plant a tree is right now.”

Focus on doing, and learning along the way.

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