The demand for Environmental, Social and Governance (ESG) experts is booming across all professional services as organisations ramp up efforts to meet ESG obligations. It’s not surprising given the indisputable business benefits. The sector however, has grown faster than the market can keep up with, creating a widespread race for talent.
In this article, we explore the structures, systems, and considerations your company will require to ensure your ESG professional can successfully lead your business, now and into the future.
Monetisation of natural resources
The United Nations Biodiversity Conference (referred to as COP15) in December highlighted that limiting global warming to 1.5°C by 2050 will be impossible without accelerated action to protect and renew the world’s natural ecosystems and biodiversity. From restoring previously deforested areas, to establishing more sustainable agricultural practices and strategically planting mangroves to protect against flooding, nature-based solutions (NbS) and the monetisation of these natural assets is central to moving forward. Sadly though, governments and business won’t commit to conservation and restoration without such financial incentive.
As way of context, currently US$154 billion a year is invested in NbS, according to the United Nations’ recent State of Finance for Nature report. But this is “pocket money” compared to the US$44 trillion of global GDP dependent on well-functioning ecosystems, according to the World Economic Forum’s New Nature Economy Report.
Company structure, systems, and considerations
The monetisation of natural resources means that in a relatively short period of time, the ESG field has become increasingly sophisticated. ESG jobs have expanded beyond data collection and dissemination to business strategy, corporate sustainability initiatives and program and change management schemes. We know that a strong ESG strategy adds to a business in many ways, including managing risk, fuelling future growth, and strengthening stakeholder relationships. It can also attract and keep top talent, lift staff morale, and increase productivity. This is only possible however, with the right talent fit. An ESG professional should be able to easily engage with other key leaders, collaborate across the organisation, and has expertise that extends well beyond functional silos.
How to best support your ESG professional
Before hiring an ESG expert, your company should have the following in place to support and further their success:
- A clear understanding of their role and responsibilities: A clear understanding of their role within the organisation and the responsibilities that will be associated with the position.
- A commitment to ESG and Diversity: A diverse ESG team can offer unique perspectives, drive innovation, and better understand stakeholder needs. Ultimately, a diverse ESG team can lead to more effective and impactful ESG strategies and initiatives.
- A clear ESG strategy: Including specific goals and objectives related to ESG performance. This will help to ensure that the ESG professional has a clear understanding of what is expected of them and can work towards achieving the company’s ESG goals.
- A supportive organisational culture: A supportive organisational culture that encourages and fosters ESG practices. This helps to ensure that the ESG professional can effectively implement and promote ESG initiatives.
- An existing ESG infrastructure: Including systems and processes for data collection and analysis, reporting, and stakeholder engagement.
Having these elements in place will help to ensure that the ESG professional can effectively measure and report ESG impact. This is crucial for companies to identify areas for improvement, showcase commitment to stakeholders, and track progress towards ESG goals.
Stockland, SBS, and Swissport all demonstrate how to successfully integrate ESG considerations into a business strategy. Stockland has a target of achieving net-zero emissions by 2028, SBS has developed a Reconciliation Action Plan to support Indigenous Australians, and Swissport’s sustainability agenda includes ESG measures to decarbonise operations, reduce waste, and improve diversity and inclusion as an employer. These companies have implemented various initiatives to reduce their environmental impact and have been recognised for their sustainability efforts. In fact, SBS was named the most sustainable media company globally by Corporate Knights.
ESG vs sustainability strategy
ESG is based on standards set by lawmakers, investors, and ESG reporting organisations such as the GRI, TCFD and MSCI. Sustainability standards — while also set by standards groups like GHG Protocol — are more science-based and standardised.
According to a KPMG 2020 Survey of Sustainability Report, 80% of top companies now report on sustainability. In this report, the sustainability of a given company is measured under three key areas:
- Risk of biodiversity loss
- Climate change and carbon reduction reporting
- Reporting on the United Nations Sustainable Development Goals
But are these categories enough to determine if a business is sustainable? The term itself has become quite muddy leaving it open to misinterpretation and business greenwashing. Sustainability in fact means taking only what you need and leaving systems capable of continued existence.
An ESG strategy takes a more comprehensive approach to sustainability while encompassing many of the same goals and initiatives. An ESG strategy is more focused on balancing the needs of the environment with the needs of the business and its stakeholders. It lays out a company’s ESG goals so that all stakeholders, including employees and investors, can move forward together. The ESG professional plays a key role in developing, implementing, and monitoring an organisation’s ESG strategy. Additionally, technology can support ESG initiatives by providing accurate and reliable data on ESG metrics, supporting stakeholder engagement, and implementing ESG initiatives through automation and digital tools. Companies should consider leveraging the latest technology solutions available to support their ESG goals.
What phase of the ESG journey is your company?
For many companies, they understand that ESG is significant, but identifying the next steps can be a major roadblock. Some companies are ambitious with their targets and can find the implementation of sometimes lofty goals challenging. Other companies take a more staggered, cautious approach. It’s important to reflect on the culture of your organisation and where you are on your ESG journey.
Industries with high carbon emissions or reliance on natural resources may face unique challenges in implementing ESG initiatives. Nature-based solutions like reforestation and sustainable mining practices can reduce environmental impact and promote ecosystem preservation. It’s important for companies in these industries to consider challenges and explore innovative solutions, including nature-based approaches.
Having clarity on organisational culture paves the way to focus on developing a clear ESG strategy. To do this, start by identifying your current state and where you want to be in the future. Identify the pressure points between the two and break them down into simple steps. This is where your ESG professional comes in. With proper support, they can help your company succeed in implementing your ESG strategy. Before hiring an ESG professional, it’s important to consider what specific skills and expertise they will need to support your company’s unique needs.
Final thought
Has your company considered what it must have in place before hiring an ESG professional? Moir Group can help you prepare for your next hire. Get in touch.
