Environmental, Social and Governance based criteria have become the foundation to evaluate prospects of long term success for organizations across all industries. Compliance with ESG factors directly impacts long term sustainability and in turn ensures generation of topline revenue while building trust with all stakeholders, especially customers and investors.  

 

Other benefits of incorporating ESG factors into long term business strategy include the ability to retain corporate talent, encourage the onboarding of top performers within the industry, procurement of better opportunities and subsidies from the government as well as fostering healthy relationships with surrounding communities. 

 

Introducing ESG factors into the core of business activities helps reduce long term risks around environmental laws, lowers operational costs and introduces a stronger sense of motivation and purpose around day to day activities.  

 

Sustainable investment strategies grew from USD $12 trillion in 2018 to USD $17.1 trillion at the beginning of 2020. This 42% growth indicates strong rising interest and attention paid toward the incorporation of ESG strategies.  

 

Here’s how a business can incorporate ESG factors into business vision; 

 

  • Assess Future Goals  

 

To introduce better long standing practices, a business should understand where their business goals lie and how ESG risks/opportunities facilitate or hinder the same. A business must deep dive into market trends understanding what the industry is likely to evolve into and how ESG factors can be incorporated (in both long term and short term circumstances) to aid the forward trajectory. 

 

  • Look Beyond Revenue 

 

Organizations must understand the weight of their business contributions beyond profit generation. The business must take a step back and understand their activities from a birds eye view. The objective is to build a sustainable legacy. 

 

  • Align for The Future  

 

The business must understand how to reach future goals and how to differentiate themselves from existing and likely competitors. Incorporating ESG criteria practically and long term means ESG priorities work in tandem with corporate activities to meet these goals. ESG factors offer more meaningful and higher quality output while minimizing unwanted and unnecessary side effects of the business process. Incorporating these factors could be the difference between staying relevant and fading away. 

 

  • Understand ESG from A Material Standpoint 

 

The risks and opportunities associated with ESG compliance must offer long term value and not just be incorporated for the sake of it. Businesses must understand how to incorporate the best strategy while considering global standards, local rankings and competition at  any scale. ESG as a long term strategy component must be beneficial. 

 

 

  • Realign Corporate Culture  

 

Creating an air of ambition and vision within the business to help understand ESG concerns and practical solutions is critical. The business must encourage employees to understand their activities contribute to a more livable environment and goals are beyond profit generation. Value delivery to stakeholders can take multiple forms and this must be encouraged. 

 

  • Clearly Define Targets 

 

Businesses can introduce custom KPIs to ensure the business is on track to achieve overall goals. This includes understanding focal points to achieve ESG compliance and meet business targets and where the business is putting in time to solely stay competitive.  

 

  • Craft Roadmaps  

 

With all the planning and alignment complete, execution roadmaps must be created. This acts as a blueprint for employees to efficiently source and distribute resources both in terms of staffing and financing.  

 

  • Create Cyclical Processes 

 

The business must understand what components and activities must be phased out and replaced. This helps create a new order with minimal doubts and maximum productivity. 

 

  • Realistically Assess The Shift in Corporate Culture  

 

Changing management styles is difficult. While it may seem like the most practical approach, employees must get behind the change to materialize it. If there are any long/short term changes needed the business must look at easing the process. 

 

  • Navigate The Change 

Hope for the best and prepare for the worst; the business must have backup plans to institute if significant and unplanned changes occur within the business skewing away from ESG targets. The business must be able to realign as needed and not panic. 

 

To start this process, organizations can introduce ESG Advisory Services or ESG consulting for a feasibility study of existing plans.