7 tips for dealing with ESG issues

"Oh no, new requirements for corporate governance again!" In many companies, ESG issues are seen as a chore and are often dealt with in an alibi manner. However, it is clear that customers and other stakeholders are increasingly demanding the underlying values.

This is not the only reason why it is important to move away from tokenism. Rather, it is advisable to view ESG as an opportunity and to handle the requirements as efficiently and resource-efficiently as possible. Now that ESG reporting is gradually becoming mandatory for a growing number of companies, we have compiled seven tips for dealing with this complex subject area: What exactly does ESG mean?

The "E" stands for "Environment". Companies are increasingly confronted with how they deal with nature's resources. The focus is not only on greenhouse gas emissions or pollution, water consumption is also becoming an increasingly important aspect. Top managers need to take a clear stance here and ideally be so transparent that all stakeholders are on board. Relevant topics here include:

• Environmental management
• energy management
• Proportion of renewable energy sources
• Building management

The second letter, "social", refers to the variety of social issues facing organizations of all kinds today. Companies, managers and financially involved stakeholders refer to the concept of valuable human capital. Social issues must be considered globally, nationally, regionally and locally. Management boards weigh up the geographical classification with the funds available for this. Excitingly, stakeholders also expect measures against corruption, for example, as part of social honesty. Key topics in this area are:

The third part, "governance", refers, among other things, to the management style in a company. The internal and external flow of information plays a major role here. Both have an impact on employees, the media and the public who are influenced by them. Linked to this are the company's own guidelines on ethics and morals. Measures in this context include the composition of the Supervisory Board and the active prevention of bribery, fraud and corruption. Topics in this context are

• Diversity on the Supervisory Board
• Equal remuneration
• Compliance

ESG topics therefore touch on numerous subject areas. Regardless of the topic in question, a few simple tips can help you to deal with them sensibly and to the benefit of your own company:

Tip no. 1: Focus on diversity

If committees are characterized by diversity, companies benefit from new ideas and out-of-the-box approaches.

Tip no. 2: Reach your goal with coordinated strategies

Board members literally stand on the commander's hill. This makes it easier to adopt a holistic perspective. Managers can thus formulate a well-founded strategy with reference to ESG issues that supports the company's goals.

Tip no. 3: Convince with specialist knowledge

ESG issues are complex. Even more complex is the integration into the daily processes of the Management Board and the entire company. If managers keep themselves up to date on ESG issues, the integration of ESG issues is a process that is as continuous as it is simple.

Tip no. 4: Determine a clear information strategy

The respective framework conditions are also highly relevant to the communication strategy for ESG issues. If the members of a management body are aware of all the details, facts and messages, it is important to align internal and external communication accordingly. The strategic disclosure or non-disclosure of information should be clearly determined within the relevant circle.
Internal communication is a crucial keyword here. Well-prepared and executed meetings and the subsequent provision of information to the right people are the be-all and end-all. With our software, you are ideally positioned in this complex field.

Tip no. 5: Only publish verified information

If you go public with ESG topics, always make sure that the information is self-contained, reliable in terms of facts and data and solid in terms of research. One solution here would be to use experts to check the research.

Tip no. 6: Continuously develop your ESG strategy

New aspects come, old ones go. ESG topics are in flux. This means that managers should also constantly reassess the current topics and continuously adapt the associated strategy.

Tip no. 7: ESG as a PR tool

ESG topics are still uncharted territory for some stakeholders. Nevertheless, more and more people - including potential customers - are becoming interested in this topic. Use this potential in the sense of "Do good and talk about it".

Conclusion

With a confident and conscious approach to ESG issues and the right attitude, organizations can exploit the potential that lies in this major topic area. Our Leadership Impact Management (LIM) software can help to make meetings in which ESG issues are discussed more efficient and optimize decision-making. Our solution also allows the relevant information to be documented transparently and in an audit-proof manner - all in one digital location. After the decision has been made, managers can automatically track the measures taken to increase their impact and inform the right people about decisions made and activities.