What is an ESG strategy?
To get the greatest benefit from ESG measures, particularly when it comes to the built environment, it should be implemented in all areas. While we do not write ESG strategies, we can help you meet your ESG responsibilities in a sustainable and profitable way through a technology-led approach.
In the second article of our series about the importance of ESG, we take a look at what an effective ESG strategy looks like.
Other articles in this series include:
When it comes to ESG, there is no one size fits all approach that is relevant to everything. The goals a company sets itself will differ, as will the strategy to meet or exceed those goals, because there is no set legislation and ESG is currently a reporting guideline.
This can make it tough to answer the question of how to create an effective ESG strategy. Different approaches are necessary – but the upside is that means there are many different pathways to creating and implementing an effective ESG strategy.
To give one example, The European Federation of Financial Analysts Societies (EFFAS) has defined topical areas for the reporting of ESG issues for use in financial analysis of corporate performance:
- Energy efficiency
- GHG emissions
- Staff turnover
- Training and qualification
- Maturity of workforce
- Absenteeism rate
- Litigation risks
- Revenues from new products
That is a huge number of potential angles a company can go down to improve its ESG standards – so many in fact, that it is likely a lot of companies will not be able to handle all of them. In this case, it may be worth focussing your strategy on a handful of them and make significant improvements there.
By way of illustration, take energy efficiency. This is an area where almost all companies, especially those who have built environment portfolios, can make substantial improvements – and this is in fact required to in order to meet Net Zero Carbon goals. The UK as a whole has committed to become Net Zero Carbon by 2050, and cities such as Manchester have brought their own goal forward to 2038.
Buildings use a huge amount of energy, much of which is wasted through inefficiency. It was estimated at a recent government event held in Manchester – Power to the People: Enabling a Smart Energy Transition – that even during Covid shutdowns when office buildings were largely empty, they were still using up to 80% of their normal electricity.
That is just one example of energy inefficiency in the built environment, but you don’t have to look very hard to find dozens more. The reason this happens is that very few building owners have any idea about the amount of energy their buildings use, how they use it and how the wastage could be reduced. This knowledge gap, that essentially turns buildings into a kind of black box, is due to a deficit in technology – and any ESG strategy that looks to reduce energy waste in buildings needs to incorporate technology to monitor usage, gather the data and act on it intelligently.
Developing an ESG strategy is important, but even more so is working out exactly how you are going to put that plan into action. By taking a technology-based approach, you can meet your ESG strategy goals and meet your environmental responsibilities. To learn more about how IBG can help you, get in touch with our team today by completing the form below.