Transparency should become a common denominator to all business activities and performance, including sustainability. In fact, ESG transparency holds great benefits for businesses’ sustainable strategies.
We seem to be stuck in a corporate crossroad where some have very well understood that non-transparency is a dangerous reputational business risk, while others, on the contrary, believe being transparent is what could come back to haunt them.
The crossroad seems even more blurry when we talk about sustainability and ESG performance. Some take to greenwashing techniques, while others look for green-hushing as a fearful response of being accused of not doing enough.
But very few actually understand and take transparency as a corporate creed, necessary to operate and successfully carry out business activities.
ESG transparency and business strategy
There is not only a clear and very close link between sustainability and business strategy, but regulatory tendencies will likely continue to ask for more information.
It is in this context that company boards cannot escape the ESG question and what will this mean in terms of the future of a company. Directors’ role in sustainability will continue to grow, and their proactivity in the corporate sustainability strategy will be essential.
Engage employees in the sustainability strategy
Here are some key steps and questions for companies to follow on how and why to approach ESG transparency:
- First thing first, companies should always strive for a deep understanding of sustainability risks and opportunities, this is, how does sustainability affect company strategy? Is ESG integrated in risk management activities?
- Such understanding requires data and a clear procedure on how the company will collect the material data needed for ESG management and assessment. Which in turn will unveil the need for corporate sustainability governance that ensures the reliability of the data as well as the procedures.
- ESG management will also require companies to deeply understand the requirements and demands of their stakeholders, from investors to consumers or employees, it is crucial to find the proper ways to respond to them.
- Last but not least, it is crucial that the entirety of ESG management and assessment is accompanied with a coherent sustainability narrative and story; one that is consequential in all of it aspects, from data collection, to stakeholder communication and performance.
Guide to conduct a materiality analysis
Why choose transparency?
Business transparency, specially in sustainability related topics, has becomes a must for many reasons; from compulsory regulations that compel organizations to disclose non-financial information, to the increasing public demand, there is little room to support a non-transparent approach to ESG and CSR matters.
The importance of transparency is such, that many companies are even taking innovative and advance non financial reporting approaches as a means to better manage risks and opportunities. But why is this?
Many businesses have understood that a more transparent disclosure of non-financial aspects is a key element to assess risks and opportunities, as well as the best tool they have for the evaluation of company performance and future growth.
The bottomline is, companies that choose not to embrace ESG transparency will find more resistance and difficulties when looking for investor support, obtaining competitive advantage or attracting and retaining both customers and employees.
Engage employees in the ESG strategy
Sustainability is a must for most workers today, and will continue to be so as younger employees begin to enter the job market. But far from being indifferent from participation in sustainable efforts, people look for the opportunity to be actively engaged and find purpose in having a positive impact through their jobs.
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.