Your business or organisation is deeply intertwined with the fast-growing environmental, social, and governance (ESG). More stakeholders, including customers and investors, want to be associated only with responsible businesses. Therefore, you cannot be left behind in adopting sustainability , and the best starting point is crafting an ESG policy for your company.
If you are new to sustainability matters, major questions that might cross your mind are, "what is an ESG policy?" and "What does it look like?" This guide is a deeper look into ESG policy use in companies to help you prepare and effectively execute it in your organisation.
This is a documented approach that a business uses on all sustainability matters. It demonstrates the company's commitment to ensuring every unit operates sustainably. As we are going to see shortly, the policy helps to inform the ESG plan used in a company, including reporting progress to stakeholders. Therefore, it is crucial to factor in the entire process of a company’s management or operations, from sourcing raw materials to marketing, when developing a corporate ESG policy.
At this point, it is important to appreciate the difference between ESG policy and ESG frameworks. Although these two terms are often confused, they are entirely different. While ESG policy denotes a set of documented approaches, an ESG framework refers to standardised models used for guiding sustainability plans and reporting. Good examples of ESG frameworks include the Global Reporting Initiatives (GRI) and the Sustainable Development Goals (SDGs), which were developed by reputable international organisations.
The main benefit of having a good ESG policy is that it acts as a guide for sustainability-related operations in a company. When following professionally-drawn ESG policies, they help in making good sustainability-related actions and management easy, even for managers implementing it for the first time. Other benefits of having an environmental, social, and governance (ESG) policy are:
Once you realise the importance of an ESG policy, the next thing is writing it down. Here are things that you should think about and include in your ESG policy:
To draw a good ESG policy, you should start by comprehensively reviewing all areas of company operations. Then follow the best practices listed below:
Drawing an ESG policy for your company is central to making it more sustainable. As you follow the best practices to create a good ESG policy for your organisation, make sure to add the efforts to your sustainability reporting. The report tells your stakeholders about the ESG efforts through a sustainability report, and ensures the company gets the right ESG rating. To make your policy and ESG reporting work more effectively, make sure also to have appropriate sustainability management software, such as diginexESG.
Contact Diginex.com now to learn more about the best sustainability apps and all the assistance you need on ESG policy formulation and ESG reporting.
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