Gaining trust….attracting clients and investment in a transparent, accountable world
The rise of social consciousness by the consumer in western markets, matched with the increasing instant accountability through social media – anywhere in the world, is creating a seismic change in reputational appetite amongst multi-national companies and the investment community.
The ‘ESG’ phrase sums it up – ‘environmental, social, and governance’
But what does it mean?
It is summed up in a report by Deloitte in 2020 “the new ‘consumer value equation’ which still pays attention to the traditional drivers of price, taste, and convenience, but are increasingly influenced by “evolving” drivers such as health and wellness, safety, social impact, experience and transparency”.
So how does that affect my company?
Consider some of the research….what risks may you be carrying?
63% of investment decisions have been ruled out due to poor governance practices (EY, 2018);
62% of Generation Z, who will begin entering the workforce this year, prefer to buy from sustainable brands. (First Insight, 2020);
77% of companies believe there is a likelihood of modern slavery occurring in their supply chains (ETI, 2017), with 40.3 million victims of slavery in 2016 (ILO, 2016)
So what can your company do about it?
Like any area of business planning, you need to work out where are you now and what you want to achieve - before then moving forwarding. Identifying what and where the risks are to your company, how you can address them coherently, and how to exploit the opportunities that arise. That forms your ESG strategy.
To help guide you through the process of developing a coherent ESG strategy, we have teamed up with Method Grid* (www.methodgrid.com) to offer a free ESG suite of company, project and supplier self-help tools with supporting education and guidance that encompasses a number of key themes such as…
Human rights due diligence; (released - click here)
Anti-bribery and corruption; (under development; release April 2021)
Modern slavery; (under development; release May 2021)
Environmental management; (under development; release July 2021)
The first step.
Starting off on the right foot is critical – and that means undertaking a human rights due diligence assessment to create a solid foundation. While the phrase itself may create uncertainty, this is not complex. You will have much of the material and information in your business already – your overall business objectives, your people, your business’ ethical stance, human resource processes, legal commitments, supplier selection, manufacture and services processes, the environment in which you are based (cultural and physical) etc etc.
While normally you would analyse these factors from a business interest perspective, in this process you are looking to see how your business operations impact on them. This analysis will allow you to understand how to actively manage the wide variety of social and environmental impacts created by your company's operations. You can then build upon this foundation into more topic related governance areas such as anti-bribery, modern slavery and environmental management so that together, you develop and implement a coherent ESG strategy supported by a series of inter-related plans that add real financial and non-financial value to your company.
If you think the ESG topic is important to your larger prospective and current clients, or you're looking for investor support, or are keen to ensure your company take an ethical approach to business, then dive in and have a look at our free* human rights due diligence toolkit on Method Grid. It takes a project management approach to helping you and your business work through the steps. There is free guidance, education, and then task lists, with the option to reach out for more specialist guidance if you need it.
About the author – Ian Beers, Performance Director, MSS Global
We operate uniquely as a Certification Body, providing ethical assurance, including human rights due diligence and ISO 18788, PSC.1, ICoCA Certification. The only internationally accredited CB in the world to provide ethical and quality service assurance support across complex supply chains, and the land, maritime and supply chain security sectors, including extensive experience in the emergent market and fragile state and high-risk countries.
* Method Grid provides a framework approach to methodologies enabling the continuous, collaborative development of even very-complex procedures. It is free for up to 5 users.