Maturing ESG Program Management

“Claire Feeney: First, we have evolving stakeholder expectations. Certainly, regulators and legislators that are passing new requirements or disclosure requirements are a stakeholder for us to look out for, but also important to keep in mind are customers that we have, employees that work in our businesses, investors that we may want to attract or retain, as well as increasingly, partners that we work with, other stakeholders in our supply chain, as well as the local communities that we operate in and where we have our customers and our employees. We can see that a vast majority of consumers really expect corporations to be actively shaping ESG best practices. This comes from some PwC research, great stats that to me say consumers aren’t really adopting the sit back and wait to see what might be required of companies someday or what might be legislated. They’re looking to companies to really set that best practice and shape ESG practices for themselves.”

“Claire Feeney: First, I wanted to share this ESG program management lifecycle. Although on the slide it’s presented in a line and is numbered, we rarely see someone follow this exact path. This is a consensus of different activities, different categories, that make up an overall ESG program.”

“Arsh Kaur: At a high level, materiality assessment is a process that helps company organizations identify and prioritize the most relevant ESG factors for their business and stakeholders. Companies really utilize this process to ensure that they’re focusing their efforts on the issues that have the greatest potential impact on their sustainability, financial performance, and reputations. In turn, it helps those teams run a more effective ESG program. No two materiality assessments or levels of importance would look the same for different companies — it would vary widely for different industries and verticals.”

“Claire Feeney: Next, collect all the ESG data and metrics. This can come from internal or external sources, as required by the frameworks selectedand what should be material to your business. You’ll also want to establish a baseline. A lot of teams that we work with maybe understand what is material, have some frameworks, have collected data, but that is very time consuming. They haven’t yet reached the next step of going in, doing a baseline, understanding where they want to go, and setting goals with the analysis of their data. That’s a big next step where a lot of people are not, I wouldn’t say stuck, but have found themselves wondering how they can move the needle forward because collecting your data and understanding what’s material is such a big chunk of getting started.”

“Claire Feeney: Looking at the elements of a program, there’s obviously a lot that you could be doing. Maybe you’ve done a materiality assessment, but the last one you did was three years ago, and you’re not really sure when the next one will be. Or, maybe you’ve started collecting ESG data, but you’re really only looking at certain areas, maybe on the environmental impact of your business, and you haven’t really delved into the S and the G as of yet. When we break it down we’ve defined four different areas where we feel we can measure competencies in ESG and really assess maturity of an ESG program.”

“Claire Feeney: Then based on the answers to these four categories of questions, we are able to map out where organizations fall for each of those categories in what we’ve called fundamental, efficient, strategic, or groundbreaking categories.”

“Arsh Kaur: I’ll wrap up by talking a little bit about the different use cases that people look to solve for as they’re looking to mature their ESG program management? Technology plays such a crucial role in helping companies manage their ESG programs more effectively.”