An ESG lens gives new vision to old programmes

Some companies look at some of the main areas considered part of ESG and think 'we have nothing to do here because we have been doing this for many years'. In some cases, that may well be correct. Well run companies may have had many of the underlying topics of ESG being addressed for some time. Although they may not have named these initiatives ‘part of ESG’, they have been managing the underlying risk under for some time.  This is seen in situations where companies, have, for example, established environmental management systems, health and safety systems and information security management systems according to ISO standards. These systems were never built with ‘ESG’ in mind but were built to manage risks around key areas and according to international standards.  

Companies are now starting to tackle ESG areas and sustainability, and part of that analysis is to look at key risk areas across the ESG spectrum. The leaders of the ESG initiatives are looking at expectations and reporting obligations and are starting to work out the current status across the company. It is common for ESG leaders identify that some of the areas that are covered by ESG already have advanced programmes in place to manage certain risks (e.g. environmental, health & safety, anti-corruption) and are receiving some pushback from existing programme owners who are responding with the response: 'we have nothing to do here because we have been doing this for many years'.

While there is certainly some basis to make that comment, it is not quite correct that there is ‘nothing to do here’. If a company may have been operating a certified ISO management systems there is certainly ‘less to do’ but certainly not ‘nothing to do here’. For companies running uncertified programmes or programmes that are not built according to a standard (like a typical whistleblower , anti-corruption, human rights, or workplace programme) then there is certainly a lot more to do. While the rigour of a certified ISO management system is more ‘ready’ to be adapted to meet ESG requirements, a programme that is not certified nor run according to a standard is there is certainly more to have it readied for a ESG lens.

By applying an ESG lens across these existing programmes, there are common areas that arise. In order to be validly included as part of the ESG programme, these areas would need to be improved.

What are the common areas lacking in certified programmes when considering them with an ESG lens?

When looking at these ‘programmes’ there are common areas which would not be sufficient when looking at the programme with an ESG lens. At its most basic level, applying an ESG lens to look at the programme will challenge these programmes because:

• They sometimes lack clear and precise objectives and useful reporting against those objectives.
• They rarely consider a broader set of stakeholders, especially those outside the company that may be relevant from an ESG perspective.
• They are usually written and developed internally for an internal audience and not enough consideration is given to outside factors.
• They often are focused on legal compliance and not broader values, integrity, and non-legally required policy which are important elements of an ESG driven programme.
• The contents are often ‘confidential’ and never to be seen by an outside party which may not work in anexternal reporting ESG World. 

What are the common areas lacking in un-certified or programmes built without reference to a standard when considering them with an ESG lens?

When looking at these uncertified programmes or ones that have been built on best practices and not a standard, applying an ESG lens to those programmes highlights several issues:

• some of these ‘programmes’ are just a bunch of unmanaged policies masquerading as a programme
• most programmes of this type are untested, un-audited, un-verified ‘programmes’ generating few (if any) data points, few observations, have little or no documented objectives, and often not connected to any business objective.  
• reporting is often overly simplistic with a lack of data to identify whether the ‘programme’ is functioning as it intended.  
• reporting is often a very simple one paragraph report that identifies ‘number of issues reported, number of people trained or number of investigations completed’ with no trending, no root cause analysis, no predictive analysis, and nothing that would indicate that the ‘programme’ is performing according to its (often unstated) objectives.  

Speeki encourages all our clients to look at their existing programmes again and determine whether they are ready to be incorporated and ‘counted’ as part of the ESG programmes. We like to say that you should look at your existing programme through an ESG lens, and determine how best to modify and improve them to be suitable for ESG initiatives.  

Speeki’s top 6 areas to focus when considering existing programmes with an ESG lens.

1. Stakeholders.  Most programmes, even those that have been prepared according to a standard have failed to consider an expanded set of stakeholders that would be applicable to an ESG lens. These stakeholders include both internal and external groups. For ESG, there is a broader list of stakeholders including the community, the planet, customers, and even ratings services like Google and social media. While not considered broadly as part of a typical programme, when looking at things through an ESG lens, the ‘public’ has a very big stake in your programme. You will be reviewed, rated and assessed often with little or no input from you on everything that you do. You need to think through who, where and what groups will be doing this and include them as part of your stakeholder assessment.
2. Roles and responsibilities. If you are looking to look at your programme through an ESG lens, then best to include the ESG leadership as one of the participants in your programme. They can assist in packaging the programme to meet the ESG requirements and take ownership of some of the external stakeholder reporting elements. They have some important data sets that they need to ensure are being developed by the programmes and are important to identifying any gaps in what is currently being measured.
3. Incident Reporting.  Most programmes, whether they are health & safety or anti-corruption, have access to an incident reporting system to report misconduct of potential failures or problems. Most of these systems are older style and lacking in modern features. Some are still relying on emails and phone calls and are not app-ready, mobile-ready, reporters capable of being anonymous and in multiple languages. There is a large improvement in technology to receive, conduct triage and conduct investigations. The management of incidents is very important to ESG as it is a key reporting element that will be reportable under various reporting standards. Moreover, the incidents that happen can be utilised in more detailed predictive monitoring solutions that can start to produce better predictions on potential issues. 
4. Awareness, communications & training.  As the ESG issues being to existing programmes more stakeholders, many of whom might be external, the awareness, communication and training initiatives of these programmes will need to revisited. Much will need to be sone around stakeholder awareness and training and the corresponding reporting.  
5. Monitoring and Measuring.  The ESG team will need to assess the current monitoring and measuring of the programmes that are in place to see if they are measuring the right areas and generating the right data that needs to be reported to stakeholders or as part of an external filing. The monitoring completed under many programmes is very focused on ‘failures’ and less about trends of the performance of the system itself. Much can be done to look at dashboards and broader trending analysis through better data management. These elements are the ones that ESG professionals will need to help complete reporting.
6. Enhanced Reporting and Government Filings.  Most of the current programmes run by companies are internal. They rarely report to the company at large and restrict their reports to very few people. The ESG world will require much more broader reporting and likely government filings to be done as parr of newstandards on reporting. While the ESG team will be very helpful in this area, much of the data will need to be generated by the programme itself. There will need to be a lot of work done to marry the current reporting with a broader audience of stakeholders that are interested in ESG. This may involve deep analysis of privilege, legal, privacy and competitive issues to determine how much data is being able to be released.

Many companies have existing programmes built over the last 20 years of programme development. While many are world-class and built according to standards and are even certified by accredited certification bodies, some rework will need to be done to build in ESG areas if they are to be included as part of the ESG initiatives. For companies that have no programmes at all and are new to building programmes to manage key ESG risks, then this advice is also equally appropriate. Engage with the content owners, programme owners and the ESG to build a programme that manages a risk and enable the ESG to maximise the value of those programmes for ESG purposes.