Five steps to embedding ESG principles at every level
Derarca Dennis sets out five practical steps organisations can take today to embed environmental, social and governance principles at every level
Organisations are beginning to recognise that responsibility for driving the environmental, social and governance (ESG) agenda sits with all parts of a business—the age of a siloed approach is over.
For those seeking practical ways to make sustainability a part of everyday working life, here are five steps you can take to deliver steady, meaningful progress.
1. ‘No regrets’ next steps
Create ongoing movement people can see by focusing on clear tasks that build confidence, strengthen basic capabilities and show that progress on sustainability is already underway.
‘No regrets’ moves are low-risk, high-impact actions leaders can take now to build momentum and prepare their organisations for future ESG demands. These steps can help companies:
- Deliver existing ESG initiatives more effectively;
- Build stronger data foundations;
- Improve governance and oversight;
- Set early milestones that demonstrate measurable progress; and
- Upskilling teams across the organisation.
These steps strengthen the organisation’s foundation, empowering teams and providing visible signs of progress from the outset.
2. Build internal coalitions
Leading organisations invest early in building internal coalitions across finance, operations, human resources, procurement, risk, technology and operations teams. This helps create:
- An integrated corporate and sustainability strategy;
- Alignment across finance, HR, operations, technology and procurement functions;
- Clear responsibilities and roles that can accelerate progress;
- Shared accountability and views regarding future expectations; and
- Improved ongoing engagement across the organisation, fostering an “all hands on deck” culture.
Strong internal coalitions help organisations engage with internal and external stakeholders while ensuring sustainability is not siloed.
3. Value chain engagement strategy
Progress in sustainability depends not just on internal action, but also the wider ecosystem in which an organisation operates. This means understanding the system and working closely with key value chain stakeholders. Key actions include:
- Mapping internal and external stakeholders;
- Understanding how each group influences the organisation and how they interact with each other;
- Creating simple ways to collaborate on shared needs or risks;
- Building steady working relationships that support long-term partnerships; and
- Sharing insights learned across the value chain stakeholder network.
This approach moves organisations from transactional engagement to strategic, collaborative partnerships.
4. Build an agile roadmap you can use
Providing teams with a practical plan can help to guide action and support adaptation over time.
Effective roadmaps identify leverage points, decision milestones and investment horizons while keeping organisations focused on long-term ESG ambitions.
Organisations should recognise that some actions will follow a clear sequence, while others will depend on new technologies, policy developments or external partners.
Elements of effective roadmaps include:
- Identifying decision milestones and investment horizons to support the organisation’s vision and strategy;
- Planning across short, medium and long-term timeframes to maintain continuous progress without losing strategic direction;
- Staying agile and open to adapting roadmaps as implementation and science evolve; and
- Allowing room for new technologies and policies to develop.
A practical, adaptable roadmap helps organisations keep long-term ambitions in view while guiding the everyday decisions that shape progress.
5. Perform end-to-end ESG baselining and target setting
Effective ESG baselining goes beyond numbers to examine the systemic enablers and inhibitors of sustainability performance.
Support this by conducting an assessment and gathering baseline data across:
- Culture;
- Leadership habits;
- Team capability;
- Governance and operations;
- Technology readiness; and
- Value-chain dynamics.
A full assessment gives leaders a grounded picture of strengths, barriers and opportunities across the organisation. This also supports the establishment of targets that are informed, meaningful and considerate of current ESG initiatives.
Derarca Dennis is Assurance Partner and Sustainability Services Lead at EY Ireland