Nickerson Celebrates Earth Day 2022

Open green field with wind turbines

A Look at Environmental, Social and Governance (ESG) Reporting and Why It’s Crucial To Sustainability

On Earth Day this year, as we reflect on important aspects of our mission and vision — to elevate the experiential journey and serve as a trusted, global partner for elite, forward-thinking brands — we also took some time to think about the importance of environmental, social and governance (ESG), sustainability and what it takes to be successful in this area.

More and more companies, especially in the built environment, are increasingly focused on ESG goals, and how those goals fit into a responsible and sustainable future.

Many companies, even those that are not required to do so from a compliance standpoint, are implementing ESG reports that include key metrics and initiatives, allowing increased transparency about the risks and opportunities they face.

Environment, Social and Government graphic

ESG typically measures performance through a defined set of criteria, assessing environmental and social impacts and the effectiveness of corporate governance in managing them. Creating an ESG report is no easy task. It must meet the requirements of compliance-related reporting methodology and include the right information based on the company or industry-related focus areas. If regulatory-driven compliance isn’t a driver, companies must decide what information is relevant and what indicators should be used to measure and assess progress. If a company has just begun ESG reporting, deciding how to benchmark data is also an important decision.

Importantly, and an area where many companies face challenges, is the identification of why they are embarking on an ESG journey in the first place. Organizations must identify with whom they are attempting to communicate, a valid and realistic timeframe and how success will be measured. Failure to answer these questions has led to long-term challenges in ESG reporting and ultimately in the success of the effort. Many entities looking to build out robust ESG reporting rely on an array of ESG paradigms and rating systems.

Man planting a young plant in the ground

Once a company makes a commitment to ESG and sustainability reporting, the current team needs to agree on how to perform, as well as a widespread commitment to transformation. It’s not enough to deliver short-term results. What is the company’s vision for tomorrow and how is the company leadership prepared to support and sustain those efforts? Is there a commitment to changing the way a company operates and is organized to meet ESG and sustainability goals?

Finally, companies need to assess their culture to determine if they can engage in ESG and sustainability behaviors. If not, they must determine what strategies they’ll need to rapidly employ to get there. A top-down approach is rarely effective in any change-management initiative, and ESG is no exception. Team members at every level should have a voice in the process and the ability to provide input and feedback (even when it’s critical), as well as involvement in planning efforts. Team members should feel a sense of ownership over the effort; otherwise, it will be difficult to sustain long-term success.

Volunteers picking up plastic water bottles from an open grassy field

The good news is that ESG is something that the majority of the population believes in and supports. It is increasingly becoming a staple requirement for investors. (Some investors even refuse to provide funds to entities without robust ESG reporting.) At home and at work, environmentally beneficial practices make our lives better. By and large, people recognize that. Social initiatives, where team members can bring their whole, authentic selves to work along with strong diversity, equity, and inclusion strategies help people to develop and thrive, leading to success for both individuals and companies. Putting people first means prioritizing health, safety and well-being in the office and at home. Governance is the key to maintaining all these efforts by creating a structure that supports long-term success.

Ultimately, ESG reporting and a commitment to sustainability speaks to a company’s goal to operate as a purpose-driven and impactful company — for team members, stakeholders and communities. We celebrate those companies, organizations, and industries that are redefining their visions and implementing strategic plans to drive progress and accountability for their employees and for the planet.

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