Overcoming Barriers in ESG (2024)

We know that your company's success depends on the proper execution of an ESG program. I think this is beyond discussion. In fact, 71% of CEOs believe it is their personal responsibility to guarantee that their organization's ESG policies are in line with the values of their consumers, according to KPMG. There are several serious obstacles that make it challenging to develop an efficient ESG program.

In this section, we're going to go over common barriers to implementing an effective ESG program, and In this part, we'll address frequent obstacles to putting in place an efficient ESG program

and, more importantly, what you can do to overcome them.

There may be a number of unique barriers to the successful implementation of ESG standards in your organization. But here are a number of common barriers.

Concern that ESG is a distraction from the business.
Feeling like there are too many frameworks to navigate.
Lacking knowledge, and capacity to analyze the ESG requirements.
Having an overly complex internal process or experiencing organizational silos.
Experiencing difficulties with data accuracy, feeling time and resource constraints.
Concerns about going public with the data.
Lack of clarity around how to measure and disclose inconsistent disclosure requests, lack of internal leadership, or clear staffing responsibility for ESG.

Hence, if any of these obstacles apply to you, don't be concerned. We'll spend some time discussing how you can get over them.

Here are several ways that you can overcome common barriers to ESG implementation:

First, ensure that you have a purpose-driven culture.

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2. Understand the ESG frameworks and the rapidly changing, moving landscape.

Understanding the universe of ESG frameworks is critical to effectively meeting stakeholder expectations.
Prioritize which metrics make the most sense for you.
Commonalities in ESG disclosure areas and metrics can be found across all ESG frameworks.
Choose a framework and specific metrics that make the most sense for your industry.

3. Prioritize going above the minimum, stand out and prepare for the future and ensure that the board and the CEO are leading.

Now, this may seem obvious, but be authentic and trustworthy.

Ensure the accuracy of your data.
Report.

Honestly, those that treat this mostly as a PR exercise are going to fail and don't over or under-promise.

4. Invest in the resources you'll need in order to get the ESG work accomplished. Ensure that you have adequate time, expertise, and budget for this work.

Don't make internal processes overly complex.
Hire outside consultants, data tracking software auditors, and reporters as you need.
Ensure inclusive ownership and decision-making at the end of the day.

ESG aims to improve the world by holding responsible parties accountable. Without everyone in the organization taking responsibility for the efficient execution of ESG goals and the accuracy of their reporting, it would not be achievable in any way. A top-down approach where the board or CEO merely demands specific ESG criteria and then demands positive news reporting outcomes would be absolutely unproductive. Your ESG endeavors would be reduced to a crumbling house of cards. Instead, inform everyone inside the organization, show them how they contribute to the corporation's success in ESG, and motivate them to understand the significance to the world and your business.

Overall, by addressing these barriers to ESG implementation, organizations can create long-term value for their stakeholders and contribute to a more sustainable future.

Information Source: Udemy