A multi-stakeholder strategy
Long-lasting impact starts with the “why” for all stakeholders, not just investors, and a robust set of measurable narratives and actions around each component – environment, social, and governance.
The pressure to generate profit has historically led some companies to believe they must choose between purpose and profit, leading to short-term thinking and acting. When done right, it’s not an either/or, and it’s not just shareholders. Companies must also consider the needs of employees, communities, partners, vendors, society, and the environment.
A stand for systemic change
Redesigning products and services that align with the environmental and social issues customers care about are the new “table stakes.” But doing so in a way that offers new, unique, and valued benefits (think GMC’s new “crab walk” EV) enables businesses to thrive. In this scenario, the selling point is the new features as much as the “green.” Change flows through the entire enterprise, including brand, marketing, communication, product management, operations, supply chain, capabilities, leadership, and culture.
Greater stakeholder acceptance starts from the larger context of who’s impacted and leads to greater stakeholder acceptance because the focus is on value to customers, investing in employees, dealing fairly with suppliers, and supporting communities — alongside long-term shareholder value.
Activating ESG strategy
It will take systemic change – total enterprise reinvention – for ESG to have substance and impact. Unless woven into the fabric of the organizations, ESG is nothing more than an office, a role, or a person.
The call for a unified set of ESG standards has emphasized sustainability’s spot on the priority agenda, requiring leaders to re-evaluate their existing processes for measuring, managing, and reporting ESG performance.
Fully delivering on sustainability commitments requires the right technology and business practices, including comprehensive ESG data to assess risks, big, audacious goals, and sticky policies. In doing so, they can build accountability across the organization and, ultimately, create greater business value. Companies must approach it as a top-to-bottom transformation integrated into day-to-day operations at all levels of the organization. Only then can they rearchitect performance measurement to unlock the total value from and impact of their ESG strategy.
