5 Steps to building a successful ESG program in 12 months

This week’s post is a guest blog written by Christine Uri.

Regulators, investors, and clients are all demanding that corporations provide transparent environmental, social, and governance (ESG) disclosures and take action to improve their ESG performance. At the same time, ESG missteps can result in loss of business, loss of investment dollars, greenwashing allegations, and brand damage. Companies are launching ESG programs in response to these growing expectations. However, many companies lack a dedicated ESG headcount. The responsibility for ESG then falls to current employees.

Employees suddenly tasked with ESG often find themselves floundering – not knowing where to start. This doesn’t have to be you. If you follow these five steps, you can successfully launch a new ESG program, or uplevel an existing program, in 12 months. For more guidance, on each of these steps, check out the 12-Month ESG Roadmap for In-house Counsel.

Step 1: Assess your ESG gaps

To build a strategic ESG program, you need to understand your stakeholder’s expectations, your strengths, and your gaps. Start by assessing your current state.  

• Create a master list of potential ESG actions based on inputs from clients, investors, third-party assessments, and upcoming regulations.
• Inventory your current ESG practices against this master list. (You find that you have more pieces than you think!)

• Classify your gap areas into quick wins, actions to be explored, and items to consider in the future.

Outcome: A clear and documented understanding of your current ESG performance.

Step 2: Build ESG support

Through your assessment, you will identify actions that require cross-functional resources and budget. Building a successful ESG program requires top-down support. Take the time to build this support.

• Meet one-on-one with top leaders to identify their ESG pain points and gather insights on any reservations they have about ESG.

• Build a common understanding among your executive team members about ESG fundamentals, market drivers, and the regulatory landscape through training.
• Develop a business case for ESG based on the objectives of your leadership team.

Outcome: Executive buy-in, secured resources, and a shared understanding of ESG priorities.

Step 3: Create an ESG strategy

The next step is to develop a focused and actionable ESG strategy that aligns with your organization’s purpose, values, and business objectives. The work you do here will lay the groundwork for effective execution and measurable outcomes.

• Engage your executive team in a strategy-building session. The objective of this session is to identify one to three key focus areas for your ESG program that are aligned with business objectives and stakeholder expectations.

• Establish clear ESG governance structures at the board, executive, and company levels. Your governance structure should define roles and responsibilities to ensure accountability and oversight.

Outcome: A well-defined ESG strategy aligned with business goals and established governance frameworks.

Step 4: Take action on your ESG goals

All too often, companies skip over the step of actually taking action on their ESG strategy. There is a rush to provide reporting to external stakeholders, and just getting out an ESG report can feel like a big win. Remember the reason why your stakeholders are asking for ESG reporting.

Stakeholders use ESG reporting to determine whether your company is appropriately managing risks and opportunities. They compare your performance in this area to your competitors. For your ESG reports to be well-received, you need to make progress on your ESG strategy over time. Here is how to make your company’s ESG aspirations a reality:

• Establish a cross-functional working group responsible for delivering on the ESG strategy set by the executive team.

• Break the strategy down into time-bound goals. Develop project plans outlining specific actions, timelines, and KPIs. Create individual accountability for the actions.

• Monitor, evaluate, and report on ESG goals regularly to track progress and adapt strategies as needed.

Outcome: Implemented ESG initiatives, measurable progress, and demonstrated commitment to ESG goals.

Step 5: Report on ESG progress

You have set your ESG strategy. You are accomplishing your goals. Now it’s time to communicate your ESG performance, achievements, and impacts to internal and external stakeholders.

• Choose an appropriate ESG reporting framework and format. Be selective. Reporting in multiple formats can be distracting.

• Set realistic timeframes, allocate resources, engage stakeholders, and leverage technology for effective reporting.

• Establish a rigorous review process for ESG reports that includes legal, finance, and executive team members. Statements made in the report must have appropriate evidence to guard against greenwashing.

Outcome: Transparent and credible reporting showcasing ESG progress, fostering stakeholder trust, and driving continuous improvement.

When you first dive into ESG, you may feel like you need a machete to cut through the acronyms, regulations, and paperwork. But in the heart of this jungle is an opportunity to build a stronger business and a better world. You can make it through if you take it step by step – one day at a time. Let this roadmap be your guide. 

Christine Uri is an experienced C-Suite executive and general counsel who has led global legal and sustainability teams at a Fortune 500 energy company. She brings deep industry expertise in climate and first-hand experience implementing ESG programs addressing climate change, human rights, ethics, and other emerging areas. She has been recognized as a Top 100 Leader in Sustainability.

Today Christine helps in-house counsel operationalize ESG with ease through her company ESG for In-house. You can find Christine on Linkedin where she publishes practical insights on ESG for nearly 20,000 followers.

To learn more about ESG and contracting, check out our ESG Playbook.