** 
Our second question today:
Q2. What are best practice examples and where are the pitfalls we must avoid?**
1 Like
There is data to show that companies that prioritize ESG perform better and are seen more favorably by consumers. As a community, we need to crystalize the connection between different topics of relevance and demonstrate how correlated they are. For example, investing in girl’s education helps mitigate climate risk, or how access to healthcare improves employee retention.
If such programs are seen as related to the bottom line and directly affecting material risk, there will be a higher likelihood of adoption.
Indeed. I think recent turmoil in the markets played a part in undermining the ‘ESG investments perform better’ argument, but the longer time goes on, the more evidence there is that this is the case
A corporate ESG approach reinforces the need for shared values. It can be a too to make corporations partner and develop strategic cooperation. ESG introduces businesses in a sistemic market where people, resources and places matter.
Will go with the pitfalls first … bandaid solutions and excellent pilots … that do not get integrated into the operations of the organisation long term … need to have a balanced innovation growth plan that takes a systems view and creates virtuous pathways for contribution and transformation - externally and internally (benefits)
Can you share any of this data with us Fareeda - have you reference links you could include here?
Greenwashing is a pitfall we must all avoid. One way to do this is with carefully chosen metrics. A company must be able to demonstrate progress towards real and measurable targets in order to satisfy an ESG requirement.
The S in ESG has been historically harder to measure (and consequently gets less attention) We’re trying to address this with research, case studies and recommending tangible metrics. Education’s Position at the Core of ESG
Pitfalls to avoid:
ESG should be integrated into the core business strategy and decision-making processes. Avoid treating ESG as a separate and isolated initiative, as this may hinder its effectiveness and long-term sustainability.
Avoid the short term, instead promote long-term thinking. Emphasize the importance of adopting a long-term perspective in ESG management. Discourage the prioritization of short-term gains at the expense of sustainable, holistic solutions. Focus on fostering innovation, building resilience, and creating enduring value as primary objectives.
Avoid inadequate metrics and reporting. Establish comprehensive metrics and reporting systems to monitor advancements and proficiently convey ESG achievements. Transparent and uniform reporting empowers stakeholders to evaluate the reliability and significance of ESG endeavors.
Avoid making false or misleading claims about ESG practices or performance. Ensure that ESG initiatives are backed by tangible actions and outcomes and they are authentic, measurable, and transparent.
2 Likes
Great point - Long term over short term thinking is a crucial.
1 Like
Pit falls include political advocacy / lobbying that is counter to what a company is positioning publicly through thought leadership, marketing, etc. (e.g. talking about climate action but lobbying against the IRA in the US, or other climate policies) University of Michigan’s Erb Institute developed Principles of Corporate Political Responsibility which provide a framework / roadmap for companies to think through these possible challenges and more broadly, when and how to engage in political issues. https://erb.umich.edu/partner-with-erb/erb-principles/
2 Likes
With the disbanding of the Shared Value Initiative (https://www.sharedvalue.org) - is shared value alive still or are we back to friedman model (A Friedman doctrine‐- The Social Responsibility Of Business Is to Increase Its Profits - The New York Times) ?
A balanced approach is required … both short -term and long term … the key is an overall approach … unfortunately most departments of any organisation work in silos … how many cross-function senior management training is held ?
1 Like
The RISE framework is a powerful tool for businesses looking to create value and drive social change in a sustainable and responsible manner. By following the pathways of transformation outlined in the framework, businesses can not only improve their bottom line but also make a positive impact on society and the environment. We believe that this framework provides a clear roadmap for businesses to transition toward sustainable and responsible growth. The specific pathways of transformation outlined can serve as a valuable guide for businesses looking to navigate the challenges of today’s rapidly changing world and build a more sustainable future.
I believe that ESG standards now need to reflect the industries of the future and we should start articulating the Env & Soc standards now for the following: 1) environmental and social risks and impact management for the extraction of minerals and metals in more extreme environments and to supply and support the space industry including satellite production/ potential space tourism/ deep sea mining; 2) clarity over the rights and responsibilities in relation to all the data that is being captured by these space-based technologies and a values-based statement on control/access/use of this corresponding data; and 3) the ethics/principles as well as rights and responsibilities around the robotics industries
1 Like
Welcome Helen - great to have you join 
We need to be realistic and transparent with clients about what our work will and will not achieve.
If we are to build trust among our clients, our messages need to be clear,
based on achievable and valid information.
We should avoid jargon and clichés, ensuring we translate concepts into language that is accessible.
We should be able to guide our counter-parts in their own communications/expectation-setting
within their own organizations.
We need to set them (and by default ourselves), up for success.
1 Like
U.S. viewpoint on pitfalls:
ESG attacks involve a few corporates (Disney, Anheiser Busch, Nike, etc) but mostly center on investors (like BlackRock). The reason is that corporate directors can use the business judgement rule to shelter their activities. Investors who are fiduciaries can only act to make money for their beneficiaries, however, so any investor who puts money into companies that are not ultimately working for the shareholder is squandering their beneficiaries’ money. That’s why it is important for corporates to assist investors by framing all of their activities as ultimately benefiting shareholders.
And how would you respond when this transparency and nuanced explanation is taken out of context? have you any good examples or personal experience?
Agreed, Paul. This is also where stronger regulation needs to come into play