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A five-step approach to setting your ESG strategy
IndustriesPublic & Social SectorSustainability and ESG Insights
Five-step approach to your ESG strategy
Although each organisation has different needs, at Mazars, we have developed a pragmatic step-by-step process through which organisations can develop a robust and credible ESG strategy adapted to their own unique circumstances.
We always encourage organisations (especially those tackling ESG from scratch) to take the Mazars ESG digital health check. Our self-assessment tool highlights gaps in current ESG provision and compliance against regulatory standards. The results of this diagnostic provide a useful springboard from which to engage your organisation’s stakeholders in developing an ESG strategy using the following five-step process.
Step one
Materiality matrix. Your ESG health check may identify many potential ESG gaps or priorities for your organisation. Yet these cannot be tackled all at once. Start by identifying which areas of focus will have the greatest impact and which are quick or low-cost wins. Actions that meet both these criteria should be prioritised.
Step two
Business model compatibility. The second step is to consider whether your organisation’s current strategy and business model is compatible with delivering your ESG priorities or whether certain activities will prohibit or slow progress towards these ESG goals. Identify which areas of the organisation need to be adapted or given further support to bring them in line with ESG goals.
Step three
ESG governance. Thirdly, you need to put in place a governance structure with clear accountability for achieving progress on ESG goals. In my experience, this is typically a designated ESG committee with cross-functional representation that reports directly to your organisation’s Board or a member of your Executive team. Without the appropriate governance structure, many organisations find their ESG efforts stall soon after launch.
Step four
Pilot and implementation. The fourth stage is to move towards piloting the implementation of your agreed ESG action plan. Again, this should be approached in a manageable way, supported by strong leadership communications and clear direction. This phase allows you to sense check that your planned ESG approaches are delivering the expected results, and to fine-tune the approach, before scaling up efforts across the organisation.
Step five
Measurement and KPIs. The fifth element of an effective ESG strategy is tracking progress. It is vital to have some mechanism in place to measure what progress is being made and how quickly. Decide what are the right KPIs for your organisation, and what data sources will give reliable information. At Mazars, we encourage organisations to be transparent with this information and to consider publishing an ESG or sustainability report for their internal and external stakeholders.
Further information on our five-step approach can be found here.
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