While sometimes it feels as if the term “Environmental, Social and Governance (ESG)” has been around for a long time, in reality the term was first coined in a report from the 2005 Who Cares Wins conference in Zurich, Switzerland. And the term has been evolving ever since as more and more companies and investors catch on. These are the areas primed for ESG performance improvements.
1. Buy in to Getting Buy-in
Get senior leadership to realize that doing good for the world—and the organization itself—are not mutually exclusive. A recent PwC survey found that most consumers (83%) believe companies should shape ESG best practices, and about 85% of employees say they prefer to work for an employer that stands up for ESG principles. So getting your company to set concrete Science Based Targets, such as reducing greenhouse gas emissions by 50% for all relevant scopes (scope 1, 2 and 3) by 2030 , etc., is a great first step.
2. There’s a Lot to Learn
Sustainability is a complicated subject, so the more companies can do to educate their own workers about what they can do to create a more sustainable world, the more we all benefit. Get them thinking about whether they really need to drive to the store vs. walking or riding a bike. Can they carry a thermos or water bottle to avoid having to pick up yet another single-use plastic or paper cup? Can they give up eating meat at least a couple of days a week? One study found that if everyone reduced meat consumption by 25%, we’d save 82 million metric tons of greenhouse gas emissions per year. And the list goes on and on.
3. Scope Out Scope 1 and Scope 2
While addressing Scope 3 emissions is important, we can’t even consider those until we address Scope 1 and Scope 2. After addressing emissions related to Scope 1, start tackling Scope 2 by looking at energy sources. Where can you use solar and wind power vs. relying on fossil fuels, etc.?
4. Three’s Company, Too
If you can influence your full supply chain to make better environmental choices, that will boost your Scope 3 initiatives! Life Cycle Assessment (LCA) offers fact-based insights throughout the value chain.
5. You Can’t Do It All by Yourself
With ESG, there’s a lot to unwind, so being able to track and monitor progress is imperative. It’s more than just a means for staying in compliance, too. Companies need data, software and expert insights to get the right ESG-related information to the right people at the right time so they can make better business decisions for themselves and their communities.
Some Climate Change-Related Terms You Should Know:
- Carbon Neutrality: According to the definition of the Intergovernmental Panel on Climate Change (IPCC), carbon neutrality, or net zero CO2 emissions, refers only to carbon dioxide emissions and is a state of balance between the CO2 emitted into the atmosphere and the CO2 removed from the atmosphere.
- Corporate Sustainability: Corporate sustainability is about more than just protecting the environment, although that is core to this approach. A sustainable business is one that works in step with societal and environmental goals, rather than at odds with them.
- ESG Reporting: ESG reporting refers to the disclosure of data covering the company’s operations in three areas: environmental, social and corporate governance. It provides a snapshot of the business’s impact in these three areas for investors.
- Net Zero: Net zero is the state of reaching a global balance between human-caused greenhouse gas emissions and the human efforts to remove carbon from the atmosphere, while eliminating anthropogenic CO2 emissions entirely.
- Scope 3 Emissions: The Greenhouse Gas (GHG) Protocol categorizes greenhouse gas emissions into three groups or “Scopes.“ Scope 1 covers direct emissions from owned or controlled sources, while scope 2 includes indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company. Scope 3 includes all other indirect emissions from a company’s value chain.