ESG and Sustainability Management
In today’s business landscape, dedicated Environmental, Social, and Governance (ESG) practices have become a hallmark of successful companies. ESG practices are often a predictive factor of whether a company will achieve success and long term sustainability. It is especially crucial for the investment community to assess an organisation’s ESG practices in determining its viability as an investment. Rigorous scrutiny and due diligence around ESG factors are applied to ensure adequate risk management when evaluating an investment.
Understanding ESG Practices
But what exactly does ESG practice entail, and how are ESG practices measured?
ESG forms the core of sustainability management within an organisation and serves as a framework for its governance. The three pillars of Environmental, Social and Governance focus on distinct aspects of the organisation. To implement effective ESG measurement and management an organisation can adopt and implement an established ESG framework[1] with measurement guides to assist on the path to ESG maturation.
The Three Pillars of ESG
Below is a summary of the three ESG pillars and examples of the areas, policies, and practices they encompass within an organisation:
Environmental |
Social |
Governance |
| Climate change strategy | Adhering to labour laws | Corporate governance |
| Energy usage and efficiency | Employee benefits | Accounting integrity and transparency |
| Waste reduction/reuse and retail packaging | Fair pay and living wages | Risk management |
| Biodiversity & Indigenous plants | Equal employment opportunity | Compliance |
| Carbon footprint reduction | Responsible supply chain partnerships | Ethical business practices |
| Greenhouse gas emissions | Workplace health and safety | Avoiding conflicts of interest |
| Water management | Community engagement | Anti-bribery practices |
| Green building/construction practices | Modern day slavery policies |
ESG as a Management Framework
ESG as a management framework is a formalised strategy that includes measurable goals and processes for tracking, managing, and reporting. By focusing on ESG strategies, organisations can experience several long-term advantages beyond immediate risk management benefits. These include;
- customer and brand loyalty,
- competitive advantage,
- better financial performance,
- attractiveness to investors (especially impact investors),
- more sustainable and adaptable business practices, and
- improved employee engagement and retention.
To ensure the effectiveness of ESG strategies and programs, results and outcomes must be measured and managed. This involves setting objectives and performance targets for the overall ESG strategy and its various components. Some goals may include desired improvements on Key Performance Indices (KPIs), while others may aim to maintain current performance levels that already meet requirements. These KPIs can be quantitative, such as reductions in GHG emissions, energy, or water use, or qualitative, such as ethics policies or board diversity.
Commitment to a Sustainable Future
An effective ESG strategy and plan demonstrate a company’s commitment to risk management, cost reduction, and environmental care. It also indicates a strong stance on socioeconomic issues, including customer satisfaction, labour standards, social justice, and sustainable investments.
By leading the CHARGE towards a sustainable future, businesses not only keep pace with a changing market but actively shape it—transforming challenges into opportunities and ensuring long-term success as truly sustainable organisations.
Exactly our DNA at the CHARGE Group!
[1] Several international frameworks can be voluntarily adopted as ESG guides including; the IFRS Sustainability Disclosure Standards, SASB Standards, GRI Standards, CDP, the Task Force on Climate-related Financial Disclosures, UN Global Compact and the mandatory European Sustainability Reporting Standards (ESRS) for filing the reports required by the EU’s Corporate sustainability directive (CSRD)