ESG Initiatives: What your company can do
Companies can show that they are serious about ESG in their own business by participating in various sustainability initiatives. This convinces investors and other stakeholders.
Wiesbaden, August 27, 2021. Companies have numerous opportunities to engage in ESG and make progress in their sustainability strategy. In addition to ESG reporting, sustainability initiatives are an important building block for this. Participation in these allows the issue to be addressed collectively in a larger group and serves as a help point for specific ESG challenges. While membership often requires some effort, it is worth it because stakeholders are familiar with many of the initiatives and appreciate participation?
Commit to upholding human rights
One of the best-known initiatives is the United Nations Global Compact (UNGC): members commit to promoting ten principles for an inclusive and sustainable global economy. The UNGC places particular emphasis on upholding human and labor rights, but environmental protection also plays a role. Small companies (revenues of less than 50 million US dollars) have the opportunity to participate free of charge as “signatories”. Large companies have to pay a certain membership fee as a “participant”, which is based on the size of their revenue, but in return they can take part in UNGC workshops.
Once a year, companies must publish a progress report stating how they are implementing the ten principles. For investors, this report is another good reference point for determining how the company is doing in terms of ESG. Rating agencies also rate participation in the UNGC as extremely positive. But be careful: if you violate the principles, the UNGC can also remove you from the membership list.
Stand for sustainable entrepreneurship
Another way to stand out is to become a B Corporation. These are companies that have made a commitment to sustainability at various levels. Every three years, B Corporations must go through an auditing process in which they demonstrate the impact their business activities have on the environment, people and society. If companies achieve 80 points out of a total of 200, they are still considered as a B Corp. Participation costs are also based on revenue and start at $1,000.
Become a pioneer in your industry
Aside from initiatives aimed at all companies, almost every industry has its own initiatives that emphasize specific ESG aspects. The Better Cotton Initiative, for example, works to promote environmentally friendly production of cotton while upholding human rights. Companies can use the seal to identify sustainable cotton products.
The goal of the Together for Sustainability (TfS) initiative, on the other hand, is for the chemical industry to standardize supply chain audits in order to procure goods in a sustainable manner. TfS is also guided by the principles of the UNGC. 31 companies are already members, including Bayer, Merck and Sanofi.
It is worthwhile for each company to review which industry-specific and cross-industry initiatives could be considered to achieve relevant ESG goals with additional help. In this way, you demonstrate to your stakeholders that you are proactively engaged.
We’re happy to help you identify appropriate sustainability initiatives for your company. Get in touch here.
Michael Diegelmann: Founder and Manager
Michael Diegelmann has gained experience in over 150 communications projects (IPOs, investor relations, M&A, crisis) and has been working in the field of capital market communications since 1997. He is the author of 16 book publications relevant to the capital markets and was formerly project manager at an international consulting firm and a Frankfurt brokerage house.