Embedding ESG Into Business Processes

Companies across the globe are at very different phases of an often-complex ESG journey. 1898 & Co. has worked with clients who are well along in establishing ESG goals and targets, while others are still in the starting gate.

It is often the case that an ESG journey begins without a full comprehension of what it means, its level of importance and appropriate goals that should be established. It is common for organizations to be at varying levels of ESG pathway development. 1898 & Co. has assisted clients with ESG evaluations in a range of sectors, including oil and gas, chemical manufacturing, mining, power generation, and transmission and distribution.

It is all too common that worthy sustainability, environmental stewardship or workplace governance goals are set without broad awareness of their purpose throughout the organization. Teams are faced with implementing action plans to turn these goals into reality without actually understanding the “why.”

Technical teams are sometimes unaware that decarbonization targets have been set until they are published in a sustainability report. This can create frustration and a sense of urgency, especially as 2030 approaches — frequently the year set by many organizations for achieving interim goals.

So what does it look like to have this gap bridged? What does it look like for an ESG strategy to be embedded into business practices? Below are a few characteristics of successful ESG implementation that 1898 & Co. has observed and supported.

Shared Understanding Across the Organization

Organizations that have developed a well-integrated perspective on ESG have learned to approach ESG and more specific decarbonization goals through a multifunctional lens.

It’s a proven formula for success to have project teams comprised of members that represent technical, policy, sustainability and finance perspectives. Bringing together leaders within these disciplines helps establish well-grounded ESG criteria. The criteria must expand beyond the sustainability team and flow broadly to all levels of the organization.

Engaging cross-functional teams for implementation of ESG brings valuable points of view into early stages of the goal-setting conversation, leading to a road map that balances technical, ESG and financial realities.

Executive Backing

Successful teams almost always have executive-level buy-in for implementing ESG projects and protocols. As the C-Suite champions ESG practices, execution of strategies gains momentum for highly impactful results at all levels.

For example, requiring a company to obtain bids on projects from minority-owned or other diverse businesses is a tangible step that ultimately increases the ability to meet vital social or governance goals for diverse spend. With a clear commitment from the top that this is a corporate priority, there are no escape routes for anyone on the project team who might be tempted to stay with a familiar contractor or execution process.

Financial Commitment

Decarbonization projects often are at the heart of an ESG framework, and frequently are the most costly. With many decarbonization technologies in early stages of commercial development and deployment, capital expenditures can be significant, particularly in the early years of implementation.

It is important to adopt a longer-term view, with the understanding that this is an investment with returns that will materialize over many years as scale and broad deployment begin to take hold and result in levelized costs.

Specialized Consulting Support

Third-party consultants who have worked side by side with ESG implementation teams at a variety of organizations have familiarity with best practices for planning, engaging cross-functional project teams and the current state of technologies needed to meet decarbonization goals.

1898 & Co. has a track record of success in assisting with the ESG protocols for data gathering, target setting and execution planning. This perspective can be invaluable in delivering sound advice on the proper pathways for integrating decarbonization technologies balanced with the equally important priorities of meeting social, political and broad sustainability goals.

Where is your company on the ESG integration pathway? Bringing your company from ground zero to an integrated business model can be a challenging but rewarding process. Successful execution of ESG strategies is increasingly an element of responsible corporate citizenship that does not have to come at the expense of profitable growth and market success.