What is corporate sustainability? 5 steps to help companies implement ESG

What is corporate sustainability?

Sustainable business development is a humane rule that businesses set to ensure a balance between economic benefits and social and environmental issues. They must develop the operation process and management strategy in such a way as to not harm resources, employees' interests, etc.

In other words, sustainable business development needs to harmonize three factors: economy, social justice and environmental protection. Organizations follow the trend of focusing on responsible business, over profit.

It is the noble benefits that will help the company improve the value of products and services, attract consumers, and affirm its position in the market. Not only that, sustainable development also builds trust with partners and investors, helping them feel secure and have higher confidence in their brand.

In order for organizations to have the correct sustainable development direction, the ESG standard was born, supporting leaders to measure impact, assess risks, and quickly make decisions to implement effective plans.

- ESG - Standard for evaluating sustainable companies

- ESG stands for the set of three criteria Environmental, Social and Governance, forming the basis for companies to plan, implement and maintain sustainable development correctly. ESG will guide the organization how to manage risks as well as seize breakthrough opportunities in 3 aspects:

- Environment: sources of energy, resources, waste in the process of operating the company.

- Social: diversity, equity, safety, confidentiality, company and community relations.

- Governance: management process, compensation mechanism and diversity in the Board of Directors for effective decision making.

A 5-step process to help businesses implement ESG

Depending on each industry, scale, and plan, the way to implement ESG and the speed of success will also be different. However, here are 3 things that leaders pursuing sustainable development should pay attention to:

It is not advisable to comply just to get a good score, but to understand the exact value of each ESG criterion. Thus, the new strategies are really effective and bring real benefits to the business.

Sustainable development needs to be applied synchronously across the entire organization, so the plans applied to each E-S-G criterion need to be related to each other, ensure systematicity, and save time on implementation.

Enterprises that have started this journey need to persevere to the end, implement continuously and throughout, from mission statement to implementation, continuous improvement.

The 5-step process below can perform iteratively, from early projects to optimization, from maintenance to upgrade to ever-greater ESG levels.

Step 1: Understand the current state of the organization compared to ESG

Before starting the ESG plan, leaders need to look back and consider the current state of the business: finance, position, grammar, etc.To lay the right foundation for sustainable development, the operator should study the level of influence. when applying ESG rules to the company. In short, the company needs to understand why participating in ESG, the benefits and success rate, instead of just following the trend.

Step 2: Set up a strategy

Based on the three pillars of environment - society - governance of ESG, companies come up with ideas, initiatives and set up strategies to suit each criterion. One secret is that leaders should set goals as points for the organization to consider priorities, develop appropriate plans.

Step 3: Build a conversion roadmap

After having a sustainable development direction, companies need to create a roadmap to switch from the old way to the new method. This roadmap not only helps the implementation process later on, but also serves as a 'curriculum' to support personnel to adapt properly and quickly.

Step 4: Application into operation and deployment

Before embarking on implementation, leaders need to review the factors that need to be changed and the personnel involved to ensure progress and success rate. The organization may designate a dedicated team for supervision, or guidance if necessary. In parallel with operation, enterprises should still encourage and communicate internally continuously, so that employees are imbued with humanistic ideas and have the motivation for sustainable development in the true sense.

Step 5: Reporting and disclosing information:

Finally, and mandatory, the organization should publicly report ESG information to the relevant organizations. This helps businesses develop sustainably, get official certification, affirm their reputation, and thicken competitive advantages. Leaders can also leverage reports to build impactful stories, affirming their position in the hearts of customers and effective partners.

Above is a 5-step process that most organizations pursuing ESG can apply. However, do not forget 3 points to keep in mind when starting this journey. In particular, the correct understanding of the ESG standards is extremely important, especially for leaders - those who make decisions and lead companies.