I recently wrote an article for SME Today explaining why SMEs are key to ESG. I talked about the growing pressure to report on Environmental and Social Governance activities. Businesses that embrace these challenges can uncover significant opportunities.
However, understanding why you should do something is one thing; knowing how to do it is another. ESG is a hot topic, but businesses often feel overwhelmed by the misconception that they must address everything immediately. This can lead to messy, incoherent efforts.
In this blog, I want to reframe the challenge for you. Step back and take a holistic view of your business. Instead of trying to “solve” Environmental and Social Governance, focus on taking responsibility for your business’s impact on people and the planet. Aim to become a genuine, honest, and accountable organisation.
And there are specific actions you can take to achieve this…
Top-level Environmental and Social Governance commitment is a must
The CEO, chair, board, and CFO need to understand ESG’s importance. They must genuinely commit to taking responsibility for the business’s environmental and social impacts.
Without collective commitment, meaningful change won’t happen. Instead, businesses may face allegations of greenwashing.
Don’t wait for the perfect solution
It’s better to start and learn as you go than to wait for a perfect solution that doesn’t exist.
Everyone—customers, suppliers, and the public—understands this challenge is complex. They know you can’t fix everything at once. However, they expect businesses to show commitment by taking action and learning along the way.
Do the thinking so you can prioritise
You can’t address every Environmental and Social Governance topic, so focus on what matters most. Identify your business’s biggest impacts and prioritise those areas. By addressing these key areas, you’ll drive positive change and avoid accusations of greenwashing. Take time to evaluate your business, your industry, and how you operate. Your most significant opportunities should become clear.
Be open and honest
Focus on your business’s most significant impacts to build credibility. This approach means tackling tough issues and leaving some areas unaddressed.
Talk openly about your priorities and the challenges you face. Businesses approach other issues this way, but ESG often feels different. Treat it like any other challenge. Share your actions and justify your decisions. Environmental and Social Governance isn’t just a chance to promote positive outcomes.
Set ambitious Environmental and Social Governance goals
Your strategy should be realistic but bold. Ambitious targets will help you progress further. The ultimate goal is a sustainable, viable future for all. Don’t limit your vision to what feels achievable right now.
Innovation is transforming Environmental and Social Governance. What seems impossible today might be achievable in a few years. Set high targets to keep pushing forward.
Measure and report
Regulators require businesses to measure and report Environmental and Social Governance progress. Though challenging, these requirements serve two purposes. They show stakeholders your progress and hold your business accountable.
Reporting can help kickstart valuable insights. But don’t overdo it. Excessive monitoring can become a barrier to action. Measure what’s necessary to drive progress. Use certifications to guide you, but don’t treat them as end goals.
Some more useful Environmental and Social Governance resources
You can read about why this is important for your business in our follow-up post, ‘ESG: How Can Meeting These Goals Prepare You for the Future?’.
To hear more from Andrew and The Legal Director, visit their website.
