ESG Takes a Village: Here’s Who Should Be a Part of Yours
ESG is, in a word, big. On one dimension, the topics and issues that fall under this umbrella easily range in the hundreds. But more importantly, the impact of these issues is vast. How well you address them affects everything from consumer sentiment to employee relations, to your success attracting and retaining investors, and, ultimately, to your ability to operate your company sustainably long-term.
While somebody needs to lead the charge on ESG for your organization – and the head of IR is probably the best person for the job – he or she can’t, nor should, do the work alone. Indeed, we believe the only way to fully integrate ESG principles into the organization and effectively gather the data and metrics that need to be publicly disclosed is through a concerted team effort.
Enter the Steering Committee – Your “Office of ESG”
Establishing a steering committee accomplishes two important objectives at once: First, it enables sharing of the ESG workload. And second, it ensures management and other key stakeholders from all across the organization are engaged, committed, and aligned around the organization’s top ESG priorities.
The IRO is the obvious choice to lead the committee. This person is already used to going out to the tentacles of the organization to gather information and likely has a good relationship with the C suite. For the committee to be as effective as possible, the IRO will need a robust team around her that at a minimum, includes business leads from the following areas:
- Compliance
- Customer Engagement
- Data Security
- Human Resources
- General Counsel
- Manufacturing
- Operations
- Product Development
- Research and Innovation
Leaders from each area represent a unique stakeholder group and bring perspective on a subset of ESG issues that should collectively roll up into your company’s overall ESG position and message. Building up your team with diverse specialties and areas of expertise helps ensure no important issues fall through the cracks. It’s also a good idea to include a communication or marketing leader to help shape and direct the internal and external communications that will be necessary as part of the committee’s work.
As you choose people to form this group, keep in mind that they need to have enough seniority to make decisions or at least very strong recommendations to the CEO and the board. In other words, this is not a role for junior staffers. You need people who are well-versed in company policies and capable of efficiently gathering the data and details you will need for both strategic decision making and disclosure purposes. Remember, ESG is a big deal. It deserves the attention of the top brass.
Getting Down to the Business of ESG
Once your committee is appointed, set a schedule for monthly meetings. These times can serve as a forum for leaders to share perspective from their areas of the business and discuss external expectations. But the agenda also must be highly action driven.
A great first item of business is creating and fielding a materiality assessment. This can be in the form of an online survey directed to executives, board members, and other key external stakeholders to learn what these leaders believe are the most relevant ESG topics facing the company today.
The steering committee can use the insights gleaned to narrow down and clearly define the topics that the company will focus on in the near and long term, and then assign the appropriate committee member to champion and lead each material topic area.
Identifying and Closing the Gaps
With priorities set, the steering committee’s work turns to deeper assessment and action plan creation for each of the key issues. Depending on the severity of the gap between where a company is and where it needs to be on each material topic, the steering committee will flesh out the work to be done, prioritize and fast track any “low hanging fruit” opportunities, and schedule out and put into play action items for the bigger initiatives.
Sometimes, a material topic can be addressed quickly and relatively easily through increased public disclosure. Other times, it’s going to take policy writing, public commitments, or specific operational actions. Either way, having a respected leader in the business in charge of the roadmap for each initiative is the key to driving senior team involvement in ESG and ensuring progress is made.
You Really Are in this Together
When it comes to a concept as overarching and as imperative as ESG, it takes everyone’s commitment and contributions. By creating a steering committee and assigning the right people within your organization to lead the work, you can more quickly make the necessary strides to strengthen your company’s ESG reputation and build value for your shareholders.
How ESG Infinite Can Help.
After you form an ESG steering committee, it is critical to develop the right ESG roadmap specific to the material issues most relevant to you and where you are at in your ESG journey. By using ESG Infinite, you can access the data and insights you need to identify the next steps of your ESG program. Leverage the database built by ESG consultants that will give you guidance to establish commitments and draft disclosures, empowering you to push your ESG program forward. Contact ESG Infinite today and kickstart your ESG strategy.