Insight Article: Why do you need an ESG Consultant?

Sustainability and climate change are everywhere today and there is so much information readily available online. This knowledge is fantastic, as it is developing a climate aware culture and so change towards more sustainable living is becoming easier to do. As people’s knowledge develops so does their confidence in delivering sustainable solutions for the company they work for. This is fantastic as it means that more change is occurring, however with so much information flying around the subject is getting convoluted. To develop an effective, cost efficient sustainability (ESG) strategy it is advised to get expert support and guidance.

ESG (environmental, social and governance) reporting and sustainability strategy will take your company to the next level. Taking ESG reporting seriously shows your investors that you are future focused and may encourage them to invest more time and money. Anecdotal evidence suggests organisations that track and improve their ESG ratings are valued more highly at acquisition, than those that don’t.

Disclosing your ESG strategy and report is not the only step on your ESG journey. The strategy should provide the energy to change your company and grow for future generations. The report needs to be accepted and embraced by the board and senior leadership team, as well as disclosed to employees, clients, partners, investors, and other stakeholders. Ideally the company must update the report annually and demonstrate how much progress has been made.

But how to create your effective ESG strategy that leads and inspires change?

Organisations have two options once it has been identified that they need ESG in their company.

Option 1. Give the ESG strategy project to someone internally to do on top of their full-time job.

Advantages

• There is no extra cost.
• They are a known operator within the company.
• They already know the board, the team leaders, and how the business operates.
• If they volunteered, they will be enthusiastic and want the responsibility of such a high-profile project to demonstrate to the CEO how capable they are.
• They may already have ideas and have read lots about the subject.

Disadvantages

• It could take a long time as they would only be able to carve out some time each week away from their main job, or their main job gets neglected.
• They will have a limited sustainability skill set as ESG reporting and strategizing is not their forte. So, they will have to spend more time researching and self-teaching.
• They may get distracted by unnecessary information that is not relevant to their industry.
• They may not feel comfortable asking the CEO potentially awkward questions to get to the real data.
• Will the team leaders and board give the member of staff the time and effort necessary?

Option 2. Hire an ESG Consultant

Advantages

• Save time and energy as the consultant will ask the right people for the right information without distracting employees from their work. They will block out unnecessary noise of ever-changing advice and focus on what is right for your company.
• The strategy will be completed in a much shorter time period as the consultant has clear and uninterrupted focus. As a subject matter expert, they will already know what to do.
• Clarify the internal ESG vision, mission statement, and priorities, giving support to the board and senior leadership team to be able to successfully implement them.
• Communicate with the stakeholders to enhance the success of the ESG strategy.
  Define ESG Key Performance Indicators (KPIs) to measure the ESG performance across the business, supporting the team leaders in achieving them.
• Supply ESG training across the company, tailor made to all levels enriching employee’s knowledge.

Disadvantages

• Additional fee for the consultant on top of employee salaries.
• Your CFO will question if they are getting value for money for the consultant you choose.
• Potentially finding out uncomfortable truths about poor sustainability operations which need to be addressed.

Remember the ESG report/ policy document/strategy isn’t a one-off event. It is a tool for the company to identify risks and opportunities to make sure it not only survives in turbulent times e.g. during an energy crisis, but remains agile enough to overcome unforeseen future events and beat the competitors.

An ESG consultant will use tried and tested tools to enrich your business strategy, cut down operational costs and do it in a cost effective and timely fashion. A consultant may seem to be an unnecessary expense, but this cost will be recouped through innovative solutions that drive down operational expenses.

Ultimately the decision is yours. At SKCI we can provide you with services ranging from one-off consultancy sessions, to give you the confidence to deliver your own report and strategy, through to taking full responsibility for delivering your GRI or TCFD report, create your ESG strategy and implement via a custom-built roadmap.