Companies and organizations are increasingly getting challenged to address environmental, Social, and governance (ESG) risks and report their impacts to stakeholders. Indeed, this is transforming from being a voluntary undertaking into a mandatory requirement as governments and regulators adopt policies targeting to counter the threats facing the planet. All about ESG Standards Consulting Services in this guide.
In the past, efforts to improve sustainability did not yield much, which was attributed to a lack of standards for different ESG or sustainability parameters.
As a result, governments, international firms, and non-governmental organizations are crafting new standards aimed at helping to steer the planet out of the perils facing it, including global warming.
With the number of standards growing every year, one of the questions is likely to be, “which management standards should you implement for higher sustainability ESG score and business success?”
Keep reading to learn more about these sustainability standards and why you should work with the best ESG standards consulting services for help. Do not be left behind as others march forward with their sustainability journey and improve their ESG scores for greater success.
Brief Look at the History of ESG Standards
Before looking at the different categories of environmental, Social, and governance (ESG) standards, let’s go back to the beginning. Where exactly did the standards come from? What exactly does ESG mean? How is it applied in companies and business management?
ESG, an abbreviation of environmental, social, and governance, is a term used to measure a company’s commitment to sustainability. It denotes the three core areas of sustainability, which are used for ESG rating. It was first coined by the United Nations Environmental Program Initiative in 2005 with the aim of gauging the integrity of corporate operations.
Environmental, social and governance (ESG) is considered an easy way to demystify sustainability and its application in companies. Indeed, the ESG standards we are going to see shortly are derived from it.
This means that if you, say, run a manufacturing firm or related operation in the city, treating waste to avoid harm to the environment alone will not be enough to qualify the business as a sustainable venture. In addition to the environment, the emerging ESG standards require the company or business to focus on people and governance.
The complex nature of ESG standards, including the need for balance between environmental, social and governance pillars, can make it difficult for managers without a background in the sustainability-related field.
This is why it is a good idea to work with ESG standards consulting services for assistance with calculating ESG Score + giving ESG consulting.
Categories of Standards that You Should Know
There are many categories of ESG standards, and it is important to understand them so that you only select the best option for your company. Let’s highlight the main categories:
Disclosure Standards and Metrics
These are the commonest in environmental, Social, and governance (ESG) matters and they are used to provide frameworks for disclosures. The standards are used to inform stakeholders, such as clients and investors, about the efforts a company is making to operate ethically and responsibly.
They make it easy for the stakeholders to compare the information from different companies and make decisions on what to buy or where to invest.
How effective are the efforts adopted to reduce greenhouse gasses, address climate change, and reduce wastes in comparison to what other companies are doing?
Some of these standards and metrics include:
- The Global Reporting Initiative (GRI).
- The Sustainability Accounting Standards Board (SASB).
- The Task-force on Climate-related Financial Disclosures (TCFD).
- GHG Protocol.
- The Carbon Disclosure Project (CDP).
- Science Based Targets Initiative.
- The International Financial Reporting Standards Foundation (IFRSF).
Consulting services can help to ensure your company implements the standards accurately. They can also help you to understand the best program for data collection, analysis and report generation. Remember to always have the stakeholders who will read the ESG report at the back of the mind.
You might also want to align your company’s operations with standards that are specific to the respective industry, country, or region. Schemes are crafted for specific industries with the aim of avoiding generalization.
One of the best examples is the OECD’s Due Diligence for Responsible Supply chains of Minerals from Conflict-Affected Areas. The standards are used to help track back the minerals that are used in manufacturing to reduce the risk of fueling more conflicts across the globe.
If you take a closer look at your industry, perhaps there are initiatives that are used to guide the operations for better performance, protect society, or reduce risks.
When a company is accredited or affiliated with some of these initiatives, they can improve its Environmental, Social, and governance (ESG) rating with a significant margin. This can play a huge role in enhancing the company’s product acceptability.
Remember that even with these ESG schemes, you have to closely follow other laws and policies that guide the operations of your company in the country of consideration.
For example, companies operating in the US that follow the OECD’s Due Diligence for Responsible Supply chains of Minerals from Conflict-Affected Areas should also adhere to the Federal Laws, such as the guidelines by the Food and Drug Administration (FDA).
When you enlist ESG standards consulting services, one of the things that will be emphasized is the importance of getting accreditation from third-party organizations. They review your company using a set of principles and give a certification that stakeholders can use to know how sustainable it is.
One of the commonest of these third-party principles is the UN Guiding Principles on Business on Human Rights. These principles require companies to focus on three core areas: protecting, respecting, and remedying.
They also have actionable steps for companies to meet their respective duties and prevent every human abuse-related risk. Others notable ESG standards that your business should focus on include:
- UN Global Compact.
- ISO 26000.
- OECD Guidelines for Multinational Enterprises.
- B Corp Certification.
- ECO Vadis.
Benefits of Working with ESG Standards Consulting Services
Complying with ESG standards, both at the local and international levels, is a big challenge for most companies. Often, managers lack technical expertise, while others are pretty busy trying to steer their corporations on the right path. These are some of the reasons why you need to work with ESG standards consulting services.
The services are offered by experts in ESG management and related matters. They are also ready to help you understand the standards and comply with other sustainability-related demands. Here are other benefits of using ESG standards consulting services.
- The experts train your staff on sustainability to make ESG planning, strategy formulation and reporting easy. With all your company’s staff supporting its sustainability or ESG plan, you can expect better corporate performance at all levels.
- ESG standards consulting services can help you to identify the standards related to your industry for compliance. This can help to simplify the process of ESG strategy implementation.
- With ESG consulting professionals and their services, it is easy to follow the process of ESG reporting, adhere to reporting principles and get higher ESG scores.
- You are sure to keep the cost of ESG operations in your company low. Some suggestions you are likely to get from ESG standards consultants include selecting the right ESG program for data management and analysis. This helps to generate accurate ESG reports for stakeholders to read and appreciate the business commitment to making the planet a better home for all.
- ESG standards consulting services come in handy in helping your company optimize the benefits of the commitment to sustainability. For example, the consulting services can provide advisory to help your company or business identify solutions to address a risk such as climate change or d waste management. The efforts are then communicated to clients through ESG reporting to win their support for the company.
This post has demonstrated the importance of working with ESG standards consulting services for the best advisory. They not only make compliance easy and enjoyable, but you are sure of a high ESG score in your industry or market.
Remember that you can only enjoy these benefits by working with the best sustainability or ESG consulting services.
Contact us, one of the highest-rated ESG standards consulting services, for assistance with calculating ESG Score + giving ESG consulting services.