Anthony Santiago is relationship manager of business banking for Bank of America in Worcester.
Updated: August 16, 2021
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How midsize firms can advance ESG
By Anthony Santiago
Increased awareness around climate change, racial and social equity issues, and COVID-19 has changed the way companies in Worcester and elsewhere think about environmental, social, and governance issues. This convergence of factors has made ESG a focal point for Massachusetts companies of all sizes. Well-integrated ESG strategies provide real value in helping businesses stay successful in the face of disruption while delivering for the common good of all stakeholders.
Consumer pressures also drive companies to focus on ESG. Younger consumers are especially more likely to consider ESG issues when making purchasing decisions. According to PwC, over half of all consumers (59%) say a company’s purpose and values play an important role in its decision making.
Regardless of a company’s size and budget, there are ways to develop and implement an informed ESG strategy addressing stakeholder expectations and delivering meaningful outcomes.
1. Identify ESG issues significant to your stakeholders. The most critical component of any ESG strategy is understanding stakeholder perspectives. Businesses should assess and rank issues important to employees, customers, suppliers, investors and other stakeholders. As you identify core priorities, keep in mind that some issues – for example, COVID-19, racial equality and climate change – transcend a specific business or industry.
2. Develop a reporting and measurement framework. What gets measured gets managed, so it's essential to build a measurement framework around priority issues. Consider consulting popular ESG frameworks and tools to set goals and measure progress, such as the Global Reporting Initiative, Sustainability Accounting Standards Board, or the World Economic Forum’s International Business Council.
3. Take an intersectional approach. As you build an ESG strategy, you’ll notice many issues are related. For example, lack of access to housing correlates to intergenerational poverty and racial inequality. If your goal is to drive greater racial equality, affordable housing may be a key pillar of your strategy.
4. Look across your supply chain. Capitalize on opportunities to work with third-party partners on initiatives to create a broader industry impact. Consider how you can empower, and hold accountable, partners along your supply chain. Consider setting goals in the following areas:
- Energy: Reduce greenhouse gas emissions and work toward net-zero by submitting a science-based target. Look across your operations to identify achievable goals, set a timeline and action plan, and report on progress.
- Stakeholder relationships: Select vendors, partners and, where possible, customers based on fair labor practices and responsible environmental impact.
- Diversity, equity & inclusion: Ensure diverse populations have a seat at the table. BofA Global Research found more than 75% of Nasdaq companies don’t have a woman, under-represented minority, or LGBTQ+ member on their board. Companies can take meaningful action to address underrepresentation in the workplace by doubling down on transparency and reporting, setting company and supplier diversity goals, enhancing training, and rethinking recruiting.
5. Integrate your ESG strategy across the business. Every business unit can support ESG initiatives, whether it’s making a fair labor supplier strategy, investing in sustainable and climate-resilient infrastructure, sourcing sustainable energy, or revamping HR policies to increase diverse recruiting, hiring and retention.
6. Look to the power of your people. Even without a large budget for ESG initiatives, you have the power of your people. It’s not about the dollar amount, but it is always about action.
WBJ Web Partners
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