ESG needs to be embedded in the company strategy

CRS Trends  »  ESG criteria   »   ESG needs to be embedded in the company strategy
ESG reporting, and sustainability reporting metrics in general, are important for a variety of reasons; but there are many other prior and crucial steps to actually embed ESG in the company's sustainability strategy.

Let us preface this by saying ESG reporting is important and necessary; understanding a company’s or organization’s environmental, social and governance impacts, risks and opportunities is a very valuable information for the company and for stakeholders. 

But as of lately, there seems to be especulation around ‘ESG-washing’, which is the idea that while companies are taking on ESG reporting, they are missing the point of it all beyond legal or procedural corporate responsibilities. 

The importance of an ESG strategy

There is little doubt about the importance of ESG for the longevity and stability of businesses today. The environment, people, and the culture that governs companies are at the core of a healthy and sustainable business strategy. These three elements and their subsequent metrics are a perfect measure for sustainability. But, ESG reports are not a perfect indicator of sustainability. 

ESG strategy

This is, it is not enough for a company to solely portray ESG metrics onto an annual report and call it a day in order to claim commitment to sustainability. In other words, reporting metrics should be the last step of any ESG strategy, not the first.

The first and most important step is to actually embed ESG and sustainability at the core of the business itself. And although every company may have a different approach to the latter, here are a few ideas on how to begin: 

3 steps to embed ESG into the company's strategy

Transform governance and corporate culture to focus on sustainability. ESG commitments need to be embedded all across the company culture, meaning it is important to set specific ESG and sustainability KPIs that are supported by corporate leadership and that also include all levels of staff and employees.

This also means making sure commitments are being met in each stage and level of the company, on a practical and cultural level. In this regard, specific sustainability positions might be necessary, as well as a strong HR strategy that takes in sustainability at its core. 

Get detailed information on how to manage business risks and opportunities. Most of the time, ESG reporting and disclosure standards have process-based KPIs, which give a very poor understanding of actual risks and opportunities regarding the environment, society or governance. Developing outcome and impact-based KPI’s can actually help companies have a competitive advantage. 


While putting the necessary mechanisms into place is essential, as well as reporting about them, the results of those mechanisms is what can actually make a company improve, and stakeholders understand and gain trust. 

Join forces between material ESG issues and stakeholders’ perspectives. While reporting metrics and standards are very helpful in identifying material issues for specific industries or sectors, they are missing a very crucial perspective, that of stakeholders which are directly or indirectly affected by the company’s activities. 

Combining business assessments with key stakeholders’ assessments such as employees, investors, customers etc., can help prioritize those material issues which both sides of the story regard as important or necessary. It is as simple as finding common ground. 

It all comes down to transparency

We believe and work for transparency to be one of the key values driving the company, as it is the only way to understand what we are doing wrong, what we are doing right and what it is that we are not doing yet.

In this regard, it is essential to our work to promote good corporate governance, meaning that the processes of disclosure and transparency are followed so as to provide precise and accurate information about the financial, operational and other aspects of the company, including a more accurate definition of the ESG performance.

We have developed a corporate government tool that helps establish ESG impact objectives for employees in regards to the sustainability strategy of the company. Through our technology we are able to activate and track employees’ impact, creating engagement that translates into improved ESG metrics, reputational value and an overall positive impact for the environment and society.

If you want to know more about how we work to create a positive social and environmental impact, click here.

transparency culture esg