With the new climate change reporting requirements for public-listed companies in Malaysia and the increased awareness of 80% of SME adopters recognise the value of ESG adoption, businesses continue to find their carbon footprints under a microscope and the only solution seems to be to quickly adopt ESG to ticking a box.
Although this recent development is meant to power the nation’s goal to achieve a renewable energy mix of 70% by 2050 and reach net-zero emissions, companies often ask us, “how do I even start ESG?”
To begin your company’s ESG journey, gaining an understanding of these factors are crucial for overall success. In this article, we break down what ESG means for your company and how your company can operate responsibly today.
What is ESG?
ESG is short for Environmental, Social and Governance, and is a set of standards used to measure the organization’s environmental and social impact, according to IBM. This term is also used in the context of investing and encompasses data and metrics to inform decision-making for companies and investors.
The “Environmental” part of ESG refers to an organisation’s environmental impact and daily practices which include direct and indirect greenhouse gas emissions, as well as use of natural resources. All companies use energy and resources as well as affects and is affected by the environment.
As for “Social”, this refers to how the organization manages their relationships with the company’s stakeholders, whether it is their employees, suppliers, partners, impact on communities and more.
“Governance” covers on how the company is managed from the top which includes the shareholders’ rights, board diversity, compensation for executives and aligning with the company’s sustainability journey.
With ESG now made clearer as a whole is not only the responsibility of your sustainability department but requires everyone in the company from the operations level to the management to enjoy real results and rewards which come from strategy and operations.
How to Start ESG for Your Business Today
Step 1: Understand the state of sustainability for your business
Gain an understanding of sustainability within your board of directors, top management team and sustainability working team. Aligning and discussing a basic level of awareness, identifying gaps by conducting an internal analysis within your organisation is crucial to implementing a shared goal towards sustainability will involve everyone and impact everyday operations.
Step 2: Strategize for Success
Conduct a materiality assessment with your internal and external stakeholders to identify social and environmental issues that are related to your business. This assessment can be conducted through surveys with focus groups to address key questions the company needs to be asking to approach critical issues that need to be addressed internally to best tackle its ESG journey. The responses from the surveys and focus group will help your business come up with a sustainability framework, roadmap and targets.
Through this assessment, companies will gain clarity on what truly matters and focus efforts on the key sustainability goals that are important for the organisation and its stakeholders.
To develop a comprehensive sustainability strategy for your business, check out our article on a step-by-step guide to achieve your sustainability goals.
Step 3: Take Action
Whether it’s adopting renewable energy, coming up with a clearer company vision and mission, core values, better employee welfare, striking a balance between compliance and performance, improving organisational performance through strategy formulation and policymaking, make sure that the moves you make will contribute progress towards your sustainability journey.
For manufacturing companies, you may refer to the i-ESG framework launched by MITI that adopts a phased approach with its initial Phase 1.0 “Just Transition” scheduled from 2024 – 2026.
The Bursa Sustainability Reporting Guide recommends referencing the Global Reporting Initiative, FTSE ESG ratings model and the SDGs.
Companies who are looking to implement renewable energy can leverage SunVertax, an outright solar solution and SunValue ZERO Capex solution where businesses would provide zero upfront investment.
Step 4: Tell Your Story
Transform your sustainability wins into stories that matter and tell the world whether its’ online or offline. Ensure that the stories are connected to your company’s intentions to do better for the community, be responsible in its’ most authentic way possible.
Who knows, your business can lead others within your industry to join the movement, driving long-term meaningful change and ultimately profitability for your business.
Conclusion
Navigating the sustainability journey for your organization can be challenging which is why it’s best to rely on experts in sustainability with Sunview’s 360° sustainability solutions from energy assessment to customised solar financing options, your business is primed to drive real change gaining environmental and financial benefits.
To ensure your business makes profit from its sustainability journey, Sunview’s solar power solutions such as SunValue, which eliminates upfront costs, and SunVertax, designed for businesses seeking maximum energy independence and to minimize corporate taxes.
If you’re looking to start your journey towards sustainability with renewable energy, connect with our experts today!
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