Environmental, Social and Governance (ESG) topics have been in the news for the past few years. How your company tackles and prioritize these issues is ever changing. With that in mind, I’ve created a list of the top 10 ESG strategies your board can take at as we come into 2019.
1. Identify, discuss and adopt a strategy for how your company thinks about ESG.
2. Come up with no more than five specific things that are measurable and that relate to your business. Spread these five things across the categories of ESG, don’t just focus on one area, like environmental.
3. The quantitative things are the environmental and the governance topics. Track these over time with clear reporting so your constituents can see your progress.
4. Qualitative topics will measure a range of social, employee wellbeing and engagement. These may include training, diversity inclusion, anti-harassment, organizational development, and employee wellness. Determine a rubric that allows you to measure your progress on these qualitative areas.
5. Understand that diversity is a business imperative. Create programs to ensure that you have a workforce that is representative, at every level, of the diversity of your customers, your investors and your partners.
6. Consider whether or not issuing a green bond is right for your company. These issuances have tripled in the last year as energy, automotive and even consumer goods and technology companies have looked to green bonds as a way to finance important sustainability investments. Green bonds are another way to access the huge pools of ESG capital.
7. Ensure that your ESG program specifically addresses at least one of the United Nations 17 Sustainable Development Goals (SDGs). These are the parameters that many money managers and institutional investors are using to determine if you meet their ESG investment qualifications.
8. Pick an outside measuring firm so you have an outside barometer to measure your progress and a third party to give your program credibility.
9. Assign your ESG program to one person either the general counsel, head of investor relations or the CFO.
10. Define an outreach program to access the major pools of capital ($25 billion) that are investing in ESG friendly companies and is expected to grow to $40B in the coming few years.