Among the key aims for any business—possibly the key aim—is creating value across the board. Whether you’re creating value for your customers, your stakeholders, or your employees, the view that you’re enhancing the lives of others is essential for enjoying business success in every sense of the word.
This is mainly because consumers are voting with their dollars now more than ever before. And as we transition into digitised economies with an emphasis on sustainable production to combat the ongoing climate crisis, value is also measured through your company’s commitment to its ESG goals. These goals speak volumes about how you conduct business. Perhaps this is something already on your radar for the new financial year, having looked into energy-saving LED bulbs, reusable coffee cups, or even solar panels in Melbourne for an office upgrade.
If ESG goals are a new concept to you, however, then don’t worry. Here’s our simple but effective guide to setting realistic ESG goals for your business.
But first, the basics
Before you start setting any goals, make sure you understand what it is you’re setting. ESG stands for Environmental, Social, and Governance. Think of them as three building blocks essential for creating genuine value. Environmental goals are all about reducing the effect your company has on the environment. Minimising waste, net zero carbon emissions, that sort of thing. Social goals concern the people who engage with your company: customers, colleagues, and the communities they’re a part of.
Governance goals concern your business practices; namely, your ability to be ethical and transparent in everything you do. With an understanding of what each set of goals entails, you can get to work setting them. Let’s do that now.
Know where you’re at
If you want to set realistic goals—ESG or otherwise—you must start by assessing where your business currently stands for each of the goal categories. There’s little to gain from settling on timeframes for certain goals only to discover you lack the resources to reach those goals in time.
How thorough you take this step is up to you; just remember the input will equal the output. It need not be complicated though. For environmental goal-setting, things like energy consumption are worth investigating. For social goal-setting, surveys are an effective way to measure well-being in the office and positive reputation in the community. For governance, looking at your processes around decision making and determining if they are ethical and transparent is a great place to start.
By taking the time to understand where your business is already at, you ensure the goals you set are realistic and perhaps even concise enough that you can celebrate every milestone with your customer base. In this regard, building an ESG framework for your business can ultimately help strengthen consumer trust in your brand.
Prioritise, prioritise, prioritise
Hopefully, by getting a strong idea of where your company stands with ESG goals, you should then have an equally strong idea about which goals take priority over others. If your business is financial advice, it’s fair to assume you’d hold social and governance above environmental; on the flip side, if you manufacture plastic toys, environmental goals might demand more of your attention.
Having a clear idea of goal criticality lets you properly plan ahead and distribute resources as necessary. Of course, it’s also important to be agile with these goals, as some may become more important—or less—over time. Adjusting goal priority keeps the wheels of progress turning.
Clarity and measurability
This step is critical, especially when it comes time to prepare your annual report. The goals you set must be clear and measurable, there’s no getting around it. Ambiguity has no business in anyone’s business, and with ESG goals, things are no different. If you can’t elevator-pitch your goals to the people who engage with your business in ways they immediately grasp, then perhaps you need to simplify the aim of the goal.
Same goes for measuring goals. A goal you can’t measure is, well, we don’t know what it is. Sure isn’t a goal. Using clean data and honest metrics will not only give you an accurate account of your progress toward your goals, it will help you better understand your business as a whole.
If in doubt, trust the acronym SMART, which demands any goal be specific, measurable, achievable, relevant, and time-bound.
Monitor and report
Once you’ve set your goals, keep track of how they’re progressing. Whether you do this through ESG software like IoT monitoring solutions or your own reports, it’s up to you. Have your KPIs ready.
And remember to celebrate your progress. Big wins, small wins, it all matters – both for your staff and stakeholders, but also for all the other figures in your company’s wider community.
The trick here is to realise there is no one-size-fits-all when it comes to ESG goals. We won’t go as far as saying your business is as unique as a snowflake (which, frankly, sounds kinda weird), but there are aspects of your business which are unique to your business. That means, you must tailor your ESG goals to best suit what you do. Doing so will have you on a responsible path to making a positive difference, which is the best kind of value there is.
