Increasingly, organisations are expected to be more responsible environmentally, socially and with respect to their governance practices. We outline four ICT/technology-related strategies organisations can implement to improve the Environmental, Social and Governance (ESG) posture and their scores should they be assessed.

Outside of the financial services sector, there may be little awareness of Environmental, Social and Governance (ESG) assessments, which are criteria used to evaluate the following:

  • Environmental –  the impact an organisation has on the environment, including how it reduces its carbon footprint;
  • Social – how an organisation treats its employees and customers, and would also include matters related to diversity, equity and inclusion;
  • Governance – the governance practices and ethical behaviour of its leadership, and would include issues such as how an organisation promotes accountability and transparency, prevents corruption, and fosters cybersecurity, privacy and data protection.

Increasingly, an organisation’s ESG performance is being used by investors, financial institutions, customers, asset managers, and other stakeholders to provide insights into the leadership, culture and sense of corporate social responsibility. The outcomes of such evaluations can help stakeholders identify potential vulnerabilities and so minimise their risk. On the other hand, a high-scoring ESG assessment can improve an organisation’s competitiveness and attractiveness as an investment vehicle, for example, and facilitate its continued growth.  

Historically, ESG is used in financial circles, but increasingly, stakeholders are expecting organisations generally to demonstrate conscientious and responsible leadership and to be answerable along the lines of the three ESG pillars. Below we outline four key strategies that organisations can adopt to address their environmental impact and their leadership and social responsibilities more responsibly.

 

1. Adopt more sustainable and eco-friendly practices

Environmental impact is not a topic that organisations tend to focus on unless it is being specifically fostered in their corporate culture. Further, there is a sense that incorporating more environmentally aware practices is expensive, which arguably, has been a deterrent for many organisations to consider them.

Though some initiatives can have a large upfront cost, such as procuring and installing solar panels to reduce reliance on the public power grid, which may be generating electricity from non-renewable resources, there are numerous activities and programmes that can be implemented using a phased approach. For example, organisations can transition over time to changing from the typical incandescent bulbs to more energy-saving versions, having lights and air-conditioning on timers or activated by motion sensors, purchasing equipment that comprises a large percentage of recyclable material, and even separating waste and encouraging recycling.

Additionally, IT and ICT equipment use many precious metals and minerals, and if improperly disposed of can be toxic to the environment and even to humans. So more conscientious buying decisions, trying to extend the life of equipment, being intentional and knowledgeable on how, when and where your equipment is disposed of, along with tracking energy consumption, water usage and waste production, are among the ways in which organisations can reduce their carbon footprint and minimize their environmental impact.

 

2.  Monitor and manage social and governance risk

Regardless of how comprehensive the processes and systems an organisation has established, unless there are checks and balances, they are likely to be compromised, and more gravely, the organisation could be unaware of those breaches. As was discussed in the article, Having trust issues? Why fully digitised and trust-less systems and processes will be the future of business, monitoring, being able to track activity and having scrupulous records that are auditable, are vital.

Almost regardless of the size of the organisation, cybersecurity, privacy and data protection are increasingly coming under more public and regulatory scrutiny. But it is not enough to have comprehensive policies and procedures. They must be properly implemented and regularly monitored to ensure that procedures are being followed and the prescribed standards are maintained. However, it is also critical that should a breach occur, or a process not be followed, that it is flagged and the necessary remedial steps are taken and documented.

 

3.  Encourage telecommuting and remote work

Although most organisations were able to operate well when all of their employees were not onsite every day, with the relaxation of work-from-home arrangements, many organisations have reverted to demanding that their staff work exclusively onsite. However, such a posture suggests that

  • Employees must travel to and from work, which is contributing to the organisation’s carbon footprint and environmental impact
  • Facilitating greater work-life balance by employees and supporting their overall well-being is not a consideration
  • The organisation is not prepared to leverage technology to increase productivity and efficiency,
  • The organisation is not progressive in its practices and the culture it wishes to foster.

To be fair, remote arrangements represent a paradigm shift in not only how organisations operate, but also in their relationship with their employees and the greater sense of control they feel they can exert when employees are onsite. However, the dynamics of the workplace have been changing, as we highlighted in 5 critical recruitment truths when securing tech talent in this digital age, and to some degree, the power imbalance between organisations and their employees (and even prospective hires) has shifted. The latter have become more empowered, and are more aware of their value, which has resulted in higher turnover rates in many industries.

To improve staff retention, lower their environmental impact and be seen to care for their staff’s well-being, organisations ought to consider implementing remote working and telecommuting arrangements, even on a hybrid basis in the first instance. More importantly, these arrangements must be adequately supported by technology, procedures and processes, which can help to address many of the concerns that organisations have, and have resulted in them demanding full-time onsite work once they were allowed to do so.  

 

4.  Greater digital engagement with stakeholders

Finally, as much as most organisations these days tend to have an online presence, often, that presence is static and rarely (or sporadically) updated. To a considerable degree, organisations see their online presence as sales channels, and not as avenues to build and maintain a relationship with their stakeholders.

Changing the paradigm to ‘digital engagement’ requires two-way communication – from the organisation to its stakeholders and vice versa – to be fostered. Further, in addition to supporting its marketing efforts, the organisation’s digital channels can be used to highlight its ESG efforts and impact, which in turn could be seen as fostering greater transparency and accountability, which are becoming an increasingly influential consideration to consumers and investors as they decide where to spend their time and money.

 

 

Image credit: jcomp (Freepik)