Now, more than ever, the communities and campuses we work in are yearning for change. Maybe it’s a change in how we impact on our environment. Perhaps it’s a change in how we view and interact with each other. Possibly it’s an improvement in the accountability and transparency of the organizations that impact our daily lives in so many ways. Or could it be that change is needed in all these areas?

If you believe, as I do, that we need to do more to protect our environment, improve connections with people inside and outside our workplaces, and increase confidence in our organizations, then ESG is for you. If you’re not familiar with ESG, it stands for Environmental, Social, and Governance—which serve as the three pillars of the framework. Within these three areas, the framework focuses on how we deal with the issues, risks, opportunities, and inequalities that may exist in our daily business activities.

To deal with ESG issues successfully, you must collect and track sufficient operational data, develop and nurture strong lines of communication with your internal and external customers, and work to foster confidence in how your organization is managed. Unfortunately, there is far more in the ESG framework than I can discuss in a short article. However, here are some ways you can incorporate ESG into your ongoing operations and strategic planning efforts:

Environmental—A great first step is identifying what environmental issues are applicable to your organization and where your organization may be at risk. Take a detailed look at how your operation can impact the environment. This can include your fuel and power consumption, light pollution, noise pollution, waste generated, water inflows and outflows, and the supplies you use and how you source them. Potential environmental risks that could negatively impact your business might include air and water pollution caused by operational activities, improper land use, and inappropriate waste disposal. Next, talk with your stakeholders about what’s important to them. This could include discussions with key stakeholders in your community, online stakeholder surveys, and townhall meetings.

Once you’ve identified what’s relevant and where your risks are, start collecting data on the identified items/issues and develop a plan to track data going forward. Set realistic annual targets for reducing energy consumption, fuel use, water use, waste, and greenhouse gas emissions over time. Develop policies and procedures for environment-related issues with a focus on reducing pollution, minimizing risks, and meeting regulatory requirements.

• Continue to coordinate with stakeholders to ensure their concerns are addressed. Finally, provide summarized annual reports to share your progress and let your community know that you’re serious about improving your organization’s impact on the environment.

• Social—Similar to environmental issues, it’s hard to know where to focus your attention until you know what’s important and where you may be at risk. Take a hard look at your organization to determine how well you deal with issues like employee engagement and satisfaction, workplace health and safety, diversity, customer satisfaction, procurement processes, and stakeholder relations. Develop appropriate policies and procedures to solidify your commitment to community concerns and update them as conditions change. The policies should reflect your commitment to ensuring your organization acts in a legal, ethical, and equitable manner. Consider conducting annual employee, customer, and stakeholder surveys to better understand what’s working in your operation, where there are concerns, and how your customers and stakeholders think you can improve.
• Governance—Governance is focused on the oversight, transparency, financial and operational controls, and accountability of your organization. Assess the higher-level management of your organization—think about your board of directors or upper-level administration. Are they provided with sufficient information to provide proper oversight? Do they have sufficient independence to make necessary decisions in the best interest of your various stakeholders? Do you conduct independent third-party audits? Through discussions with your staff and upper-level management, make sure your policies and procedures can appropriately mitigate risks related to bribery, corruption, fraud, conflicts of interest, cybersecurity, data protection and privacy, and applicable government regulations. Also, make sure your organization provides adequate whistleblower protection should the need arise. Finally, make sure your organization effectively engages with stakeholder groups and provides opportunities for timely feedback.

There are certainly more ESG-related issues you’ll need to consider as you move forward. This would include risks related to changes in laws, regulations, technologies, markets, and reputation (collectively, transition risks), as well as changes in the environment like water stress, wildfire, and extreme weather (collectively, physical risks). After covering the basics, you should move on to these risks to ensure you’re adequately prepared for the future.

Like many issues today, some people view the ESG framework through a politicized lens. However, ESG can provide a significant number of benefits that can not only improve your organization, but also your bottom line. By helping to identify potential environmental, health and safety, legal, and governance risks, ESG can help you minimize costs and allow you to focus your efforts, and budget, on the issues that really matter. Improved connections with your employees and communities can help reduce turnover and related costs, improve organizational effectiveness, and grow your customer base. More effective oversight of your organization, and improved transparency, will help increase confidence in what you do, reduce the chances of loss due to fraud or corruption, and increase the level of support for your program. The primary reason the ESG framework is being adopted by so many organizations today is because of its profound effect on the ongoing success of a business—both structurally and financially.

The ESG framework could have a significant impact on your organization and community by providing the structure you need to improve your team, your organization, and your community. So, what could a group of thoughtful, committed citizens in your organization do to change the world? ◆