In June, Atlas Technical Consultants published its inaugural environmental, social, and governance (ESG) report after five years in business and two years in the stock exchange.
Solving modern climate challenges requires hands-on collaboration with our stakeholders. We wanted to share the lessons we’ve gleaned in the process for other firms developing their first-ever ESG reports.
Here’s what we learned:
1. GET EXECUTIVES ON BOARD
In short, nothing is going to happen unless your CEO and top executives drive and champion the ESG process. It must be a priority for them to:
- Provide overall direction, set measurable goals, and weigh in on the priorities and objectives you set
- Adequately fund the ESG report process — with resources and personnel
- Direct leaders and employees to assist in the process
- Publicly declare their support for goal setting, tracking, measurement, and reporting
We created an ESG executive steering committee to develop and implement our vision and strategy. The committee contributes to our materiality assessment, a process that identifies the ESG topics that have the biggest impacts on an organization and its stakeholders. They also help with the practicality of us being able to meet our targets and the commitment to follow through.
2. LISTEN TO YOUR STAKEHOLDERS
For a company the size of ours (3,500 employees spanning 100 offices), preparing an ESG report is clearly the right thing to do. As we’re seeing the devastating effects of climate change, especially on our most vulnerable communities worldwide, every company should be paying attention to their environmental impact.
Our clients feel the same way. For example, we began talking to many of them about sustainable concrete. Did you know concrete is the third largest industrial source of pollution and causes up to 8% of global CO2 emissions? We can make a real impact by using reclaimed asphalt pavement, but only if we make it a priority as a company.
Our entire ESG process was driven by the commitments of our clients and investors. If you think your company’s clients and investors do not care about sustainability, diversity, safety, and governance, you haven’t been listening to them. Our clients and investors are savvy stakeholders who care about the future of society and our planet. It’s our responsibility to hear their ideas — and honor them.
3. THINK LIKE A STRATEGIST, NOT AS AN ENGINEER
When engineers and other environmental professionals share their successful projects and the innovative solutions they develop for their clients, it can feel unnatural. At Atlas, we found that we were sharing what we had accomplished but not the community impact of our projects. So even though many of our projects benefit the environment, no one was talking about them.
For example, we offer leak detection testing as a service. Leak detection is performed to meet regulatory requirements and prevent accidents, sure, but the bottom line is it also safeguards people’s health. That is, we’re protecting the air and water for people who live in the community and the environment. Public health is just as important as the specific environmental solutions we offer.
We finally realized that we need to talk about how we’re affecting the lives in our communities, or no one will learn from what we are doing.
4. HELP YOUR EMPLOYEES CONNECT THE DOTS
Unfortunately, you cannot hurry this process. You might feel impatient and want to see an outcome immediately but creating buy-in takes time.
First, you must help your employees understand the clear outcomes of your ESG program and why it is critical to your business. When starting out, it takes time to clearly define goals that will produce outcomes, making it difficult to bring people along.
This is why strategic communications are critical. We have to help make the connection between an employee’s role and their involvement in the implementation of our ESG strategy. Help your employees connect these three dots and understand the return on investment for each:
- Investors: Surveys with financial professionals, investors, and fund selectors found that 71% want to make a positive social impact with their investments, and 81% want their investments to match their personal values. In 2021, investors put $70 billion into ESG impact funds, up from $51.1 billion in 2020, according to Morningstar.
- Existing and potential employees: In a survey conducted earlier this year, IBM found that 68% of 16,000+ respondents wanted to work for environmentally sustainable companies. Many Atlas employees believe investing in ESG is the right thing to do.
- Clients: 83% of people think companies should be actively shaping ESG best practices. Investing in an ESG program gives consultants an edge in competing and retaining work, because clients want to hire purpose-driven brands.
You can have multiple reasons for developing an ESG program, but helping your employees understand why you are doing it is critical for its success. Your ESG team may be asking employees to add new responsibilities onto their day jobs, so understanding the “why” is imperative.
Next, we’ll explain what we learned in setting up our ESG framework. Stay tuned for the second article in this series.
Priya Jain | Chief Growth Officer & ESG Chair| ATLAS