ESG is no longer optional.
It is not legally mandated – yet – but it is essentially mandated by investors: several studies show that somewhere between 75% – 90% of institutional investors will only back companies that report ESG metrics and have a plan in place to improve them on a year-over-year basis. So a strategy and a roadmap to implement the strategy to achieve ESG goals and targets provide an advantage in capital attraction. Detailing ESG performance is not just about showing how much a company cares about the environment or social issues; it is more about showing that a company is sustainable in itself, as ESG performance is the single best indicator for a company’s long-term business future.
ESG is not going away, leverage that to your advantage.
Why is reporting not enough?
Reporting is necessary, but it is not enough.
Without a strategy and a roadmap to implement that strategy, reporting only tells the current state of a company installing no confidence in how to address and amend issues to improve environmental, social, and governance metrics. This is fine for companies that have zero emissions under all three scopes, with perfect governance procedures and ideal social commitments. There are exactly zero such companies in the world.
Reporting is a great start, but a strategy and roadmap must also be put in place once a company decides to report.
Why does reporting without a roadmap or strategy reduce performance and diminish attractiveness?
Reporting without a strategy or roadmap reduces performance because ESG metrics are only being tracked after the fact.
Since they are not being actively tracked during operations there are no set targets to achieve or plans for improving metrics. This reduces ESG performance. This diminishes attractiveness to investors.
In an increasingly competitive capital landscape why would you want to decrease your attractiveness?
What is an ESG Strategy?
An ESG strategy is not a plan.
A strategy is bigger than a plan. It tackles the question of why, with a larger scope with adaptability for the many paths to the desired outcome. It is a blueprint or layout designed to accomplish a specific goal that is open for adaptation and change when needed. A strategy encourages openness, debate and adjustment from every side of the equation.
A strategy embraces deep questions with out-of-the-box, effective answers that convert for a natural flow of thought into continual momentum that builds until success is not only achieved, but expectations are surpassed.
What is an ESG Roadmap?
A roadmap is a tool (typically a visual one) that shows how the strategy is being implemented.
This benefits management, but also customers, investors, and stakeholders from all areas of the company. When creating a roadmap, individual steps are defined and communicated, showing how goals can be achieved with timelines and priorities. ESG roadmaps might include SBTi targets, social inclusion policy initiatives, emissions-reducing actions (such as procuring nuclear energy), and key milestones for implementation of these advances. Roadmaps often utilize flow diagrams that show how different tasks, goals, and milestones connect helping ensure that changes happen on schedule and helping to best allocate resources and responsibilities.
The roadmap works alongside the strategy to ensure it is carried out, that necessary improvements to ESG metrics are being made, and progress is being demonstrably achieved across time.
How do companies implement ESG strategies and roadmaps without them becoming a distraction, leading to greenwashing, or hurting bottom lines?
This is where Treebridge brings extra extrinsic value.
Developing a strategy to improve ESG metrics actually improves business performance. This is the complete opposite of greenwashing: developing a roadmap that focuses on action rather than creating a distraction. Improving ESG metrics is great for business. Period.
We love green trees; we do not love greenwashing.