One of the newest acronyms that seems to be popping up at every turn is ESG. Christy Cook helps female leaders in small and medium businesses navigate the complex world of ESG and compete in the 21st century.
What is ESG?
Environmental, Social, Governance (ESG) is a structure to help investors evaluate a company’s exposure to risk under the pillars of ESG. Socially conscious investors use ESG as criteria for gauging the viability of a potential investment. Most often, ESG issues include board diversity or employee treatment, supply chain resilience, or carbon accounting.
“People often use the word sustainability and ESG interchangeably, but they are quite different. One definition that really resonates with me is that ESG looks at how the world impacts a company, whereas sustainability focuses on how a company impacts the world”
Christy began her sustainability work while at Emory University in Atlanta well before there was a course of study for ESG. Her employer asked her to represent them on a committee of department heads that was studying the field of sustainability. The purpose of this group was to create a recommendation about the strategic direction of sustainability for the university.
“We spent a year researching and discussing all the various areas of sustainability. Who are the most “sustainable” universities in the world and why? What are the best diets in the world and how do those diets impact the people and planet? The multidisciplinary approach and immersion into these complex topics was the best education.”
Christy took that career step that began at Emory University and scaled her solutions to 8,500 sites in North America for Sodexo the 19th largest employer in the world. A career milestone included building the foundation that became the largest food waste prevention program in the world.
Currently, Christy is the Chief Sustainability Officer for vranda, an ESG startup that helps companies track their ESG data for reporting and analysis. She is also the founder of InvestHER Strategies a company that guides female leaders from small to medium enterprises (SMEs) who work in sustainability, succeed.
“The pressure is coming, and this is an opportunity for SMEs to excel because while they are likely already making an impact, their story is not being shared like the multinational global enterprises. Oftentimes, the companies are not aware of how much they are already doing, or how they benchmark in their industry.”
American companies are lagging behind their peers in the European Union and the United Kingdom on ESG disclosure. SMEs often fail to prioritize ESG, because they categorize it as lower risk at their size and nothing could be further from the truth. In the global economy and with increased pressure of carbon accounting and climate risk, large multi-national companies are required to report. This means SME’s in their supply chain could be greatly impacted. And soon.
CEO’s are responding to the pressure they are feeling from customers, boards, and investors by hiring someone to address this for the company. In most cases, the CEO doesn’t have the knowledge to provide strategic direction to the newly hired person, so they are left to figure things out on their own. This is where I come in.
“The two biggest challenges I hear from clients is ‘Where do I start?’ and ‘What should I do first?’ The simple answer is you start where you are today.”
The first step you should take to get started is to complete a Materiality Assessment. This will help you identify the largest areas of risk for your company which will guide your strategy and then set you on your way with the associated actions. Christy has two free resources on her website to help companies with this.
ESG Components
Here are some quick tips and insights to get you started.
Carbon is the hottest Environmental topic right now. This is being discussed extensively because there are disclosure requirements in the EU and UK but it’s on the horizon through the SEC in the US. The Federal Government just recently released requirements for contractors. If you have a fleet, consider electric vehicles. Carbon can be complex so if you want to do something that might be easier think about recycling or composting.
Social refers to the human side of your business and usually resides under the Diversity, Equity, Inclusion, and Belonging (DEIB) umbrella. Some examples include considerations of the impact on people from the products you source or sell to consumers and the treatment of your own employees. Some simple actions you can consider increasing your DEI performance include ensuring your job descriptions are free of bias or consider implementing a hiring board for employee interviews.
“We have one client that is trying to lower employee turnover and we are helping them understand that through the lens of ESG. We have reviewed and updated hiring practices and added some additional employee training. This leads to attracting more diverse and talented employees and reducing the costs of employee turnover. Although the program is newly implemented and we need more data, we have already seen a reduction in new hire turnover.”
Governance is related to the inner workings of a business. The most basic level of ethical business practices is compliance with any laws related to your business. However, to ensure long-term and mutually beneficial relationships, companies strive to act with the highest professional standards.
A common example of governance is the diversification of boards to ensure minority representation. Consumers are becoming interested in knowing more about the company with which they are interacting. Every business should think of this as a branding opportunity. They need to study their appeal from the consumer’s viewpoint, and what they might want.
“I am the happiest when I am helping people. ESG is a buzzword and CEOs want to do something, so they hire new college graduates to their staff without a firm strategy, or even an understanding of what really needs to be done.”
That is exactly why Christy started InvestHER Strategies. She offers her experience and mentorship to female sustainability leaders.
Christy believes in sustainability and saving the environment so much that she even has a bio-diverse property.
“We grow our own food as much as we can plus, I built a greenhouse from scratch using old windows to extend the growing season. We have been working to restore the land with native plants and are chemical free. Monarch Butterflies lay their eggs on the milkweed and enjoy the blooms in our prairie to fuel up before their migration to Mexico. There is always more to do and learn from nature.”
To help discover if Christy can be a resource for you, visit her website and review the free resources to get started now. Learn about the issues you should be working on now and then how to prioritize the actions.
To learn more about Christy and her work visit www.investherstrategies.com or http://www.vranda.io.
