So many entities, commercial, industrial and institutions, still ask questions about “why ESG”.
They view it as an additional administrative burden. In this 3-part series, Sharon Myburgh sketches the development of ESG and how an entity can deploy it to its advantage, because this is a win-win for finances and circular economy, argues the Sustainomics executive responsible for carbon foot printing, energy audits, energy management systems.
Sharon Myburgh holds a Masters degree in Urban & Regional Development, certificates in Project Management and Strategic Planning and various formal qualifications in energy and water efficiency, circular economy, carbon footprint, and data analysis.
She has 30 years’ experience in impact assessments, more than 20 of which in consulting and has served on various boards as non-executive director.
For companies to ensure their sustainability, they need to rethink their business models and strategies to incorporate in the new model determination of tolerance spaces (within which they can operate and trade), and risks, including natural disasters, pandemics, energy, water and other risks relevant to their geographical areas of operation and trade.
Morever, performance criteria for their sustainability and future-proofing of their operations as well as values, principles and ethics on which they base their business. Investors would be looking out for these, not just statements for popularity, but commitment to sustainability.
They also need to develop integration of all business strategies, such as financial, environmental, social, etc. and measurement of criteria for purposes of auditing and also to measure progress.
Then there is monitoring of all criteria for compliance and for transparency to investors and a climate-related scenario analysis that underpins a future-proof strategy all in order to create value in the overall business strategy and to build resilience so that investors would find it an attractive proposition.
For those who have not yet done so, a good exercise is to start to measure the enterprise or institution in terms of the 17 clearly defined Sustainable Development Goals (SDG’s) and the goals and indicators that have been published.
That would already put the entity on the ESG and Circular Economy path for international investors.
Playing the game
In order to participate in Sustainability, it is of course necessary that you start looking at your data.
The list here is not exhaustive, but certainly gives an idea of data requirements to move an entity into the ESG s pace, with credibility.
It is not just about compliance, but to keep the focus to keep improving with regard to Sustainability, ideally to move into the circular economy.
Data requirements include but are not limited to: data quality, data verifiability, data accessibility, data organisation & storage, accountability and credibility, the consistency of data collection methodology and timelines, levelling the playing fields so that data is comparable and investors can benchmark the entity, benchmarking yourself in the target market.
It is still popular at many commercial and especially industrial enterprises to hold only one sector, such as the manufacturing department responsible for reporting on their sustainability, whilst the admin sector of the entity does not have a responsibility to monitor and manage their sustainability.
ESG will in future expect whole facility management of natural and other resource use.
The company will have to improve their competitive offering to attract investors and develop targets and Key Performance Indicators to measure improvements.
There are many opportunities to win at the game: improve your product or service with research and innovation; improve your financials by reducing energy and water use, and dependence on other natural resources; improve environmental sustainability by reducing emissions of carbon and other chemicals with high global warming potential; eliminate greenwashing; encourage co-operation amongst industry peers regarding research into further innovation.
Whole sectors may benefit by developing a culture of co-opetition rather than the elimination of competition.
The SDG’s and ESG is a learning space for everybody and we need to develop new role models that commerce, industry and other institutions can follow. Everybody has a responsibility to contribute to our economic, social and natural environment.
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