Jumpstart to Incorporating ESG for Small and Mid-sized Businesses
The global pandemic, ongoing natural disaster and recent social justice movements have shone a bright light on the importance of ESG and CSR. And the world is watching. Consumers, employees, and investors are paying attention to how companies address the issues that impact the world we live in.
“If we damage the natural world, we damage ourselves.”
Previously on the blog, we highlighted three reasons why ESG and CSR are here to stay and described the global pressures that companies are facing to embed sustainability into their business strategy. We’ve also scoured the web to find the latest statistics on CSR and ESG to help build the business case for making the investment. Sustainability is a journey, and we want to arm you with the knowledge and tools to help you take that first step towards driving social impact. This article reviews 3 simple steps you can take to jumpstart incorporating ESG.
ICYMI: Here are the blogs we mentioned to help you build the business case for investing in CSR and ESG.
3 Steps to Address ESG and Embrace Sustainability
1. Audit Internal Systems
The author of Simple Tips, Smart Ideas says: “Companies can apply similar steps to address sustainability as they would normally take to protect profits. The first step has to be an audit, looking at internal systems. Heating, power generation, water supply are all key areas.” Sustainability is not just for large companies.
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~66% of British mid-sized companies have audited their energy use – Nat West
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~62% of midsized British companies have invested in new technology for energy efficiency – Nat West
This simple step can help companies look for sustainability investments that will bring major cost savings. Prioritizing energy efficiency as a starting place can help small and mid-sized companies see the ROI and keep going towards a better future for their company and society.
2. Audit Supply Chain
Companies interested in reducing their carbon footprint need to evaluate emissions from their supply chain.
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60% of the carbon footprint of a manufacturing company is supply chain
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80% of carbon footprint for retailers is the supply chain
– Business Tips for the Future of Sustainability, The Telegraph UK
The good news, you can promote your company’s sustainability mission and attract more of the consumers that choose brands with sustainable business practices.
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42% of UK consumers say that brands supporting the environment and social causes is important to them
We include even more stats on CSR and ESG in the UK in this infographic.
3. Adopt a Triple Bottom Line Accounting System – Profit, People, Planet
This is all about taking the step to measure and account for how your business makes an impact. You’ve audited your business and now you should start to realize things you can measure that affect not only your profit but the environment and people.
“Taking into account not only financial results but environmental and social results often spurs companies to engage with sustainability in more meaningful ways. The moment you start measuring something you can naturally start to improve it.”- Business Tips for the Future of Sustainability, The Telegraph UK.
Remember that everyone has to start somewhere and there is lots of advice and ideas out there about what other companies are measuring. We have a section on Management and Measurement in our Exploring Social Governance Toolkit that gives companies great tools for identifying and selecting ESG criteria to measure.
Additionally, Rachel Hutchisson provides insight from her 15+ year journey in CSR and starting ESG reporting at Blackbaud. Check out this blog on Starting your ESG Reporting Journey.
How do companies measure their impact on people?
We’ve heard from CSR and sustainability leaders that they don’t know how to measure the social part of ESG. Consider the intersection of CSR and ESG is the S. Many CSR activities have metrics like charitable giving performance and employee volunteering activities. A dedicated CSR software provides tools to seamlessly run reports on a program’s performance. With a technology solution, you can create a CSR report to show your philanthropic activities. These reports are great to share with your stakeholders and employees to continue to build momentum and increase employee engagement with your CSR programs. If your company is already measuring and reporting on giving and volunteer hours, then consider quantifying your CSR impact and move from tracking outputs to tracking outcomes.
We’re excited to see so many companies start and continue to invest in CSR and ESG. We are taking the plunge with you at Blackbaud and are committed to our sustainability journey. We are also committed to supporting companies as they invest in people and our planet.