Predict & Influence Muses - Series 018: ESG & Sustainability – in the hands of a few key people or is an organisational movement?
During our engagements with different organisations to empower them with trusted, auditable, easy ESG data collection, processing and eventually reporting and actions, it is quite common that there are only a few key persons from the organisations that we are engaging. Typically, the engagements start with head of sustainability or a Chief Sustainability Officer, who may have to rope in the IT or digital department. They may roll up to someone at the top management, typically a CEO, COO or a CFO, and sometime, the discussion and decision may involve the board of directors, where the chair of the sustainability in the board may get involved. In turn, the head of sustainability/ CSO will call upon other “collaborators” in getting necessary data to assess the current situations (for reporting purpose) and determine what course of actions to be taken to enhance the sustainability practices within the organisations. The collaborators may include someone from HR, Health and Safety, Manufacturing, Corporate Secretary, Legal, Facility etc. And… That’s it.
What I meant by “that’s it” is that, as you can observe, the responsibilities of ESG and sustainability are seems to be laid on just a number of key people. While it is important to have such starting point, where the focus are only “Where are we now”, “How to get this data”, “Where to get this data”, “how does this data convert to that ESG indicator” and eventually, “how our sustainability reports and data make ways to ESG ratings by the likes of FTSE4Good, MSCI, S&P and DJ” (regardless of whether it is good or bad ratings), and “how this impact our share price” (like the downgrade by MSCI to Tencent). Again, this may seem only impacting a handful of senior people within the organisation, assuming that the there is no broad base employee share purchase/reward scheme, the broader employees of the organisation will not take notice or be serious about REAL sustainability practices and culture, as there is no impact whatsoever to their daily lives!
We always believe that sustainability/ESG is the responsibilities with EVERYONE. You may ask, what can everyone do for sustainability. In fact, the answer is, a lot. The sustainability culture and actions are supposed to be from ground up. It is just like every employee is contributing to the financial / organisational results of an organisation, either directly or indirectly bringing in revenue, or contribute to operations. In similar token, everyone in an organisation should contribute to ESG and sustainability.
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“Micro-actions”, such as remember to switch off electricity and water tap when it is not in use, make purchases that have sustainability in mind would be a good starting point. Everyone can also reduce the usage of papers and reduce waste, for example, in recycling paper, plastic etc. Instead of driving a BMW to work, we can consider taking public transport….. These are the common list that everyone can do, but one will need constant reminder so as to become habits.
If any layman checks through any of the Sustainability Reporting Guideline, they will know that a lot of common understanding of “sustainability” or “ESG” is rooted on the “E” only. Therefore, we only think of environmental related actions to be taken. However, true sustainability or a complete ESG go far beyond this. It includes whether you have attended anti-corruption training or not, whether you have participated in a charity drive running by the organisation, or donate some money for good causes. It would also mean that everyone can report an incident, an incident on a health and safety issue, or whistle-blowing a misconduct by a co-worker. It should start cultivating as a practice, or a culture, and constantly remind everyone. In this regard, a digital way to capture the actions, participate in a meaningful event, or report incidents would be good. Better yet, it can digitally nudge, recommend and reward everyone contextually. Sooner or later, it may be part of one’s measurement of contribution to an organisation for compensation purposes. For example, if you are measured by revenue for a salesperson, or by outputs if you are a factory operator, a part of your performance and contributions can be on ESG / sustainability.
These actions, once captured, will be directly and indirectly contributed to the final results on each indicator that an organisation report for their sustainability reporting. It would, therefore, becoming a meaningful movement that everyone would have a stake to participate in.