Environmental, Social, and Governance (ESG) principles have become a hot topic in today's business landscape. In our previous article, we explored the invaluable role of 'Governance' in ESG and discussed ways to set up solid governance in ESG. Here, we're diving into another essential part: establishing an ESG committee. We'll unravel how this committee is formed and why it's a game-changer for fostering sustainable businesses.
Superheroes to Have in Your ESG Committee
Establishing an ESG Committee is like forming a dream team of experts in ESG matters. It's like choosing Iron Man for his tech skills, Wonder Woman for her commitment to social justice, and Batman for his strong sense of ethics. By meticulously assembling a diverse team, your business can address ESG challenges and contribute to making the world a better place.
First up, this elite group should boast qualified ESG advisors, resembling wise wizards who know all about sustainability. Alongside them, the guardians of legal, risk, and compliance leaders to ensure everyone adheres to the rules.
Next, the financial maestros – finance executives. They’re like treasure hunters, finding the golden opportunities within the realms of ESG practices. Complementing their strategic plans are the wordsmiths, the marketing professionals, entrusted with crafting narratives seamlessly aligned with the company's messaging and a well-crafted ESG plan.
Diversifying this ensemble are the social champions— CSR professionals, dedicated to steering the ship of social responsibility. Adding depth to the narrative are investor relations representatives and HR personnel, instrumental to cultivate a sustainable corporate culture by prioritising diverse hiring practices.
Even superheroes need guidance. The Board of Directors, akin to wise mentors, oversee this powerhouse, ensuring alignment with the company's core values and long-term objectives. Advocating for fairness, broader perspectives, and gender equality within the BOD amplifies discussions, enhancing the collective wisdom steering your company toward virtuous success.
Once the committee has been established, it’s crucial to institute a three-tier reporting structure for accountability.
- The Board of Directors – to oversee, provide resources and approve plans.
- The Sustainability Management Team – to manage and lead initiatives.
- The Sustainability Working Committee – to operate and execute initiatives with required resources.
Each tier measures impacts aligned with ESG standards, aligning with their roles to ensure transparency and achieve sustainability goals.
Incorporating Recognised Global ESG Standards
In sync with this structure, integrating recognised global ESG standards becomes integral. Some notable global ESG standards include:
- Sustainability Accounting Standards Board (SASB)
- Climate Disclosure Standards Board (CDSB)
- Task Force on Climate-related Financial Disclosures (TCFD)
- Greenhouse Gas (GHG) Protocol
- Global Reporting Initiative (GRI)
By establishing an ESG committee and integrating these established standards, the foundation is set for a company's sustainable journey.
So, we're all fired up to dive into sustainability, right? But here's the catch: there's a challenge in possessing extensive ESG knowledge. Everyone's got their A-game in their respective field like finance or law, but when it comes to understanding the ins and outs of sustainability—well, that's where things get a bit fuzzy.
Therefore, the need for both training and third-party assistance becomes crucial. Here's where Sunview steps in, offering our comprehensive 360 sustainable solutions, which include ESG advisory services.
Why Is It Important to Have an ESG Committee?
Recent findings from Mattison Public Relations highlight a significant surge in ESG committee adoption by leading companies, with 54% of FTSE 100 firms leading the way. But why are these committees so vital, and how can they give businesses a competitive edge?
At the heart of strong corporate governance is a team dedicated not solely to profits but also to the '3Ps': people, planet, and profit. This approach extends beyond profit-making, acknowledging the business's societal and environmental impacts— an increasingly valued perspective in today's corporate landscape.
For sustainable success, the continuous tracking and assessment of these efforts are paramount. Companies like MISC Berhad serve as prime examples, regularly evaluating their Sustainability Strategy. This consistent evaluation ensures they remain on the right path, effectively address arising concerns, and fine-tune their strategies to remain aligned with their overarching goals. Such proactive and adaptive measures are essential in not just setting but also maintaining the trajectory towards sustainable growth and impact.
Like many forward-thinking businesses seeking to champion sustainability, we at Sunview recognise the significance of steering sustainability initiatives. To ensure the effective coordination and successful execution of initiatives outlined in our Sustainability Strategy, we've established our Sustainability Working Committees. The performance and efficiency of these committees, along with their meetings, will be appraised based on how well they accomplish the predetermined objectives for every pillar. This structured approach allows us to lead by example.
Conclusion
In a recent study exploring corporate ESG efforts, significant benefits emerged. Directors noted improvements in their company’s reputation and brand value (57%), enhanced risk management and resilience (54%), and better talent attraction and retention (44% and 40%, respectively).
These measures confirm the many benefits that come with ESG commitments, making a strong case for continuously and fully integrating ethical, sustainable practices into business operations.
Keen on exploring the transformative potential of ESG strategies for your business? Let Sunview light the way. We're here to help you navigate this landscape and unlock the full potential of ESG for your company's growth and sustainability.
