Today, environmental, social, and governance (ESG) strategy is an agenda-topping item for almost all companies – of all sizes. And for very good reasons.
The current global energy crisis, coupled with the almost-daily reporting of new climate extremes, has focused the minds of many business leaders on the need for action around minimizing the environmental impact of their operations and industries. They are also increasingly aware of the growing need for businesses to demonstrate that their aims are rooted in wider societal goals, and to act accordingly, as good corporate citizens.
In a world of dynamic global trading relationships and geopolitical change, business leaders are also under pressure like never before to show that their corporate policies and practices – from diversity and inclusion commitments to the use of customer data and the ethical codes governing production – are suitably fair, robust, and compliant.
The scale and scope of company commitments are influenced by many factors: industry sector, location, size, corporate purpose, and more. But in most cases, businesses today are seizing the opportunity to both directly and indirectly act on ESG – not only by focusing action on their own internal activities but also by contributing and influencing positive outcomes among their external stakeholders, from business partners to consumers. A bank switching to non-virgin plastic for its payment cards or a manufacturer setting a policy to only work with partners showing progress towards sustainability targets are just two examples.
To quote one famous declaration from Marc Benioff, the CEO of Salesforce, speaking at the World Economic Forum annual meeting in 2021: “There has been a mantra for too long that the business of business is business; today, the business of business is improving the state of the world.”1
To gain further insight into the business challenges – and the opportunities – of ESG, we asked two leaders from G+D’s Corporate Sustainability department – Andreas Lamina, Head of G+D’s Corporate Sustainability department, and Frank Krüger, Director Corporate Sustainability, G+D – to identity five of the critical success factors that businesses can adopt to establish a highly impactful ESG strategy today.