10 Dos and Don’ts for Embedding ESG Into Your Business Strategy

Business leaders, business executives, and their companies can reap multiple benefits by baking ESG into their business strategy – if they use the right recipe.

Environmental, Social, and Governance (ESG) principles have evolved beyond compliance and risk mitigation. A constantly growing number of business leaders and executives recognise it as a core value driver that boosts business resilience and the bottom line.

As such, ESG is becoming a core part of a company’s business strategy and crafting a meaningful ESG policy and strategy has a profound impact on a company’s longevity and success. Here, we use ESG policy, strategy and initiatives to describe the strategic and practical aspects of formulating and implementing ESG aspects of your overall business strategy.

The following practical dos and don'ts help to seamlessly bake ESG into your company's business strategy, whether you are looking to create or further develop its ESG aspects:

ESG in Business Strategy Dos:

1. Use clear and comprehensive language: Craft ESG policy and strategy with clarity and simplicity. Ensure it effectively communicates your objectives and strategies, using universally understood sustainability terminologies and frameworks.

2. Align with core business objectives: Integrate ESG aspects of your strategy and initiatives with your primary business goals and services, establishing a clear link between sustainability and business performance.

3. Involve your team: Foster a culture of engagement and inclusivity by encouraging team participation in developing and implementing ESG policies and initiatives and providing input on strategy aspects.

4. Assign accountability: Designate responsibility to knowledgeable and passionate team members to lead, implement, and continuously improve your ESG initiatives.

5. Regularly update and review: Ensure that ESG strategy and policies remain current and effective by regularly reviewing and updating them to meet evolving business needs, industry standards, and global sustainability trends.

ESG in Business Strategy Don'ts:

1. Overpromise: Maintain authenticity in your ESG commitments. Communicate the stage of your journey and avoid over-committing to unrealistic or unachievable sustainability goals.

2. Delay implementation: Begin integrating and implementing ESG initiatives as soon as possible. This can happen in stages and work through iterations to foster immediate results and sustainable, longer-term organisational culture changes.

3. Overcomplicate: Make ESG strategy elements as straightforward as possible, actionable, and adaptable to prevent them from becoming a stumbling block to innovation and practical implementation.

4. Ignore external changes: Ensure your strategy remains relevant by staying informed of and adaptable to external economic, environmental, social, and regulatory changes and trends.

5. Neglect stakeholder engagement: Turning strategy into real-work change relies on engaging with a broad spectrum of stakeholders, including customers, investors, and communities, to ensure your ESG strategy is inclusive, comprehensive, and well-informed.

It is worth noting that people are central to successfully incorporating ESG into your business strategy. Their collective passion, commitment, and expertise are pivotal for enacting effective and sustainable business practices. Well-structured integration of ESG into your broader business strategy creates a transformative blueprint that can guide your business toward sustainable success and impactful contributions to global sustainability goals – but only if employees and other stakeholders are along for the journey.

These aspects, along with the above dos and don’ts, are part of our services and solutions.