While there is plenty of buzz and confusion around ESG in today’s market, there is real value beyond the hype that can be unlocked through a well-formed ESG vision and strategy. And from our work to date in this space, we’ve seen how a successful ESG program can deliver real results for our customers in several areas.
Access to Capital: Over the past decade, institutional investment has been increasingly making its way to ESG-positive organizations. There is currently up to $30T of global capital specifically invested in or reserved for companies that can demonstrate positive ESG and sustainability performance, and this value is estimated to increase to $50T by 2025.
Talent Acquisition: There is a strong correlation between a company’s ESG performance and their ability to attract and retain talent. In a 2021 survey, over 50% of American workers said they were considering and/or actively looking to leave their current employer. This isn’t too much of a surprise as just about every industry has been feeling the effects of the Great Resignation. However, if workers believed their employer was making a “positive impact”, only 7% considered leaving their employer.
Operational Resiliency: There is increasing evidence that a sound ESG strategy can directly lead to improved operational resiliency. A recent study found that the bottom 10 percent of ESG performers in each industry are three times more likely than top ESG performers to face a catastrophic event that results in major reputational damage, fines & penalties, and/or a costly supply chain disruption.
Demand for Transparency: The regulatory climate at state and federal levels in the U.S. is moving toward environmental & social reporting mandates that align with ESG. The SEC has circulated a proposed series of mandates which are expected to be finalized in 2022 and go into effect over the next 2-3 years.
Across industries, our clients are undertaking ESG initiatives with urgency and seeking assistance in navigating the process. We recently helped a transportation services client quickly formulate and demonstrate a viable ESG strategy for capital partners and executive stakeholders. Another customer with nearly 2,000 campuses across North America asked us to assist with solutioning, planning, and managing a program for GHG emissions reporting as an initial foray into ESG. Whether your organization is trying to position itself for new or renewed capital investment, attract and retain top talent, prepare for upcoming reporting mandates, or fortify your structure and operations to enhance resiliency to downturn events, it’s imperative that you have a plan for ESG. However, this can be a daunting task as ESG spans three disparate domains, and driving a program from inception to launch can be a complex undertaking.
To help customers on their ESG journey, Trans4mative has developed a playbook that guides organizations through critical early decisions they need to make to tailor an ESG strategy that’s suited to their business. Every company and industry is different, and as such, the ESG strategy for a healthcare company will look very different from that of an energy company. Our playbook takes customers through a series of questions and decisions, aligns stakeholders on strategy and priorities, and delivers a practical roadmap for achievement. This in turn sets the stage to make an ESG commitment across the organization and clearly communicate the strategy to employees, board, investors, and the market at large.
What is your organization’s plan for ESG? Wherever you are on your ESG journey, we’d love to help.