The starting point for ESG is assessing materiality, then baseline – knowing where the organisation is regarding key ESG metrics. It requires an honest assessment of the ESG landscape in the organisation. The big question will then be: Where does the board want the company to be and what incremental steps should it take? This future-state response will result in short- and long-term goals with key accountability checkpoints along the way. The board will set the strategic objectives, incorporating these, but the management will provide a tactical role, taking short-term incremental steps to take the organisation to where it needs to be, as they remain accountable to the board.

The board culture and composition have a key bearing on the success of the sustainability journey. A diverse board improves the dynamics of the organization by offering different perspectives, which may make problem-solving easier and can generate innovative ideas and solutions. To maintain an independent and engaged board, best practice includes having clearly defined roles and expectations of board members. Members need to be evaluated for conflict of interest and the board chair needs to be rotated regularly.

Regarding ESG, board members may consider asking the right questions to make an impact on the ESG strategy. What are we doing to be a good company and how are we getting better? What are you doing to take care of the environment, our customers and other stakeholders? How does ESG fit into our organisational structure? By viewing ESG as a strategic objective, leaders can build a common language around the company’s values and understanding of what the company wants to achieve and how each person fits into the larger picture.

When a company and its board are committed to ESG, they are upholding their responsibility to evolving stakeholder priorities. Leading by example helps to maintain a good reputation and can increase long-term profitability and brand loyalty.  However, challenges can and should be expected along the way. The differentiating factor that will impact an organization’s success and growth is the organization’s response. In a workplace, there may be four different generations with very different values working on the same team. Remaining transparent and setting clear expectations, as well as checking in through every step, may help ease employees through any transitions.

It can also be difficult to carve out time to focus on priorities that may not immediately impact the bottom line and could cost money up front, that are for the greater good of the company, the environment and the community. However, every little bit counts, and measuring and tracking your progress is a must. Organizational change can be measured and shared quantitatively through financial reports, ratios, and ratings. It can be measured qualitatively through engagement via surveys and town hall meetings. When employees feel heard, they are more satisfied with their work. When they and other stakeholders understand the values of the company, they are more likely to get behind them.

No matter how big or small your goals are when it comes to ESG, a thorough self-assessment is always the first step. Once that is complete, it’s important to consider the state of your current board, set goals for the organization, explore areas of opportunity and maintain transparency every step of the way. Though it may be challenging, a company with an ESG strategy that reflects modern times reassures shareholders, invites coveted talent, and upholds social responsibility for the betterment of everyone.